What is the Dq Treat licensee's obligation regarding quality standards for business operations to protect the Trademarks and System?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
liates, officers, directors, employees, and agents; and
- (H) Company approves the location where the Restaurant will be operated during the renewal period.
- 5. FACILITY STANDARDS AND MAINTENANCE. Company may periodically establish quality standards regarding the business operations of DQ® restaurants and stores to protect the distinction, goodwill and uniformity symbolized by the Trademarks and System. Accordingly, Licensee must maintain and comply with Company's quality standards and abide by the following conditions:
- 5.1 Restaurant Facility. The Restaurant must be constructed and equipped in accordance with Company's current approved specifications and standards pertaining to equipment, inventory, signage, fixtures, location, accessory features and design and layout of the Restaurant. Licensee must not commence construction of the Restaurant, or purchase or lease a location for the development of the Restaurant, until Company has given written consent to Licensee's building plans and the location. Licensee must complete the construction of the Restaurant in accordance with the approved building plans and otherwise satisfy all building plan and site work requirements without any unauthorized alterations. If Licensee enters into a lease for the Restaurant premises, Licensee must provide the lease and all lease exhibits to Company within 5 days of its execution. Licensee must obtain all necessary permits, licenses and architectural seals, and in all other respects comply with applicable legal requirements relating to the premises, building, signs, equipment and premises, including the Americans With Disabilities Act. Company's consent to building plans or a site does not guarantee compliance with any legal requirements or the Restaurant's success at that site. Company will furnish Licensee with lists of required and approved equipment, signage, fixtures and furnishings. Licensee must not use the Restaurant premises or Authorized Location for any purpose other than the operation of the Restaurant during the term of this agreement. After the expiration or termination of this agreement,
Licensee must not use the Restaurant premises or Authorized Location in violation of section 14.6.
- 5.2 Future Alteration. Any replacement, reconstruction, addition or modification in the building, premises, interior or exterior decor or image, equipment or signage of the Restaurant to be made after Company's consent is granted for initial plans, whether at the request of Licensee or of Company, must be made in accordance Company's then current specifications and standards. Licensee must not commence any replacement, reconstruction, addition or modification until Licensee has received Company's written consent to Licensee's revised building plans. Company owns any alterations or improvements made by or on behalf of Licensee to the building plans.
- 5.3 Maintenance. Licensee must maintain the building, premises, grounds, equipment and signage used in the operation of the Restaurant in good condition and in accordance with requirements established periodically by Company, and any reasonable schedules prepared by Company based upon periodic evaluations of the premises by Company's representatives. Within 90 days after the receipt of a report based on an evaluation, Licensee must effect the items of maintenance designated in the report, including the repair of defective items or the replacement of irreparable or obsolete items of equipment and signage.
- 5.4 Relocation. If it becomes necessary to replace or relocate the Restaurant because of the condemnation of the Authorized Location, the exercise of a replacement or relocation right by Licensee's landlord, or for some other reason approved by Company, then Company will grant Licensee authority to replace or relocate upon the following conditions:
- (A) The new location must be:
- (1) Acceptable to Company;
- (2) Reasonably suited for a Restaurant;
- (3) In a location that is consistent with Company's current site selection guidelines; and
- (4) If the Restaurant is a Captive-venue Location, within the same building or venue as the Authorized Location, or if the Restaurant is a Street Location, within a 500 meter radius of the Authorized Location.
- (B) The new site must not infringe on the rights of any other licensee or sublicensee of Company.
- (C) After Licensee discontinues operation of the Restaurant at the Authorized Location, the new Restaurant must be under construction within 30 days if a Captive-venue Location, or 180 days if a Street Location.
- (A) The new location must be:
- (D) After construction commences, the new Restaurant must be open and operating within 90 days if a Captive-venue Location, or 120 days if a Street Location.
- (E) The new Restaurant must be constructed and equipped in accordance with Company's then current standards and specifications.
- 5.5 Modernization or Replacement. Licensee must modernize, refurbish or replace the building, premises, equipment, signage and grounds as is necessary to reasonably conform them to Company's then current standards for similarly situated new restaurants of the type developed under this agreement, upon renewal of this agreement, upon transfer of this agreement under the circumstances described in section 11, and every 10 years or any shorter period required by the lease for the premises. The requirements of this section 5.5 are reasonable and necessary to ensure continued public acceptance and patronage of DQ® restaurants and to avoid deterioration or obsolescence in connection with the operation of the business.
5.6 Lease.
- (A) To the extent that Company assists Licensee with any lease negotiations, Licensee acknowledges that Company or an affiliate:
- (1) has not made any representations or warranties to Licensee with respect to whether Company's or its affiliate's negotiation with the landlord will be successful, whether the lease terms or site are adequate or appropriate, nor that the Authorized Location will be ready for occupancy or opening by any specified date; and
- (2) neither Company nor an affiliate are responsible or liable to Licensee for damages arising out of any failure by Company or its affiliate to obtain the landlord's agreement to enter into a lease, the landlord's failure to enter into a lease with Licensee, or for the failure of the Authorized Location to be ready for occupancy or opening by any specified date.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, Dq Treat may periodically establish quality standards regarding the business operations of DQ® restaurants and stores to protect the distinction, goodwill and uniformity symbolized by the Trademarks and System. The licensee must maintain and comply with Dq Treat's quality standards. The restaurant must be constructed and equipped per Dq Treat's current approved specifications and standards for equipment, inventory, signage, fixtures, location, accessory features, design, and layout. The licensee cannot start construction, purchase, or lease a location without Dq Treat's written consent to the building plans and location. Construction must be completed according to approved plans without unauthorized alterations. If the licensee leases the premises, the lease and all exhibits must be provided to Dq Treat within 5 days of execution. The licensee must obtain all necessary permits, licenses, and architectural seals, complying with all applicable legal requirements, including the Americans With Disabilities Act. Dq Treat will furnish lists of required and approved equipment, signage, fixtures, and furnishings. The premises can only be used for the Dq Treat restaurant operation during the agreement term, and after expiration or termination, the premises cannot be used in violation of section 14.6 of the agreement.
The Dq Treat licensee must comply with the standards, procedures, techniques, and management systems described in the Operations Manual relating to the development and operation of the Restaurant, including product preparation, menu, storage, uniforms, financial management, equipment, facility maintenance, and sanitation. The licensee must promptly notify Dq Treat of any claim or litigation arising from the restaurant's operation. Dq Treat will provide a hard copy or electronic access to the Operations Manual, containing mandatory and suggested specifications, standards, and operating procedures. These exist to protect Dq Treat's interest in the System and Trademarks and to create a uniform customer experience, not to establish control over matters reserved to the licensee. Dq Treat may modify the Operations Manual to reflect changes in authorized products and services, required prices for Menu items, and specifications, standards, and operating procedures. The licensee will be notified of any additions and modifications to the Operations Manual and must comply with all provisions of the Operations Manual at their own expense.
The Dq Treat licensee must comply with all of Dq Treat's pre-opening training requirements for the Restaurant within 6 months prior to the Restaurant opening. If the licensee fails to comply with pre-opening training requirements, they cannot open or operate the Restaurant. The licensee and its employees must meet Dq Treat's ongoing training requirements at the licensee's expense. If the licensee is in default for failing to meet operational standards, Dq Treat may require additional training at the licensee's expense as a condition of curing the default. Dq Treat may periodically make available an in-restaurant training program at the licensee's expense, which the licensee may purchase along with training updates. The licensee must maintain and operate the Restaurant under their active and continuous supervision in compliance with the System. The licensee must have a Designated Manager and one Assistant Manager if it is their first Dq Treat restaurant, or only a Designated Manager if it is their second or more Dq Treat restaurant, who have completed all required training. New or replacement managers must meet Dq Treat's current training requirements. All Restaurant employees must work in clean uniforms approved by Dq Treat, at the licensee's or employee's cost. No employee of the licensee is deemed an employee of Dq Treat for any purpose.