What are the specific defaults that Dq Treat Licensee has no right to cure, leading to immediate termination?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
(C) Immediate Termination. Licensee has no right to cure the following defaults and this agreement terminates immediately on Company's issuance of written notice of termination:
(1) Licensee's loss of the right to occupy the Restaurant premises;
(2) If the Restaurant is destroyed or damaged, Licensee's failure to repair and reopen for operation the Restaurant at the Authorized Location within 270 days of the date of occurrence of the destruction or damage (as described in section 6.9(C));
(3) Licensee's failure to relocate and reopen in accordance with and within the time periods and conditions set forth in section 5.4;
(4) Voluntary abandonment as defined in section 6.9(B);
(5) Insolvency of Licensee or a Principal Owner or guarantor, or Licensee's or a Principal Owner's or guarantor's making an assignment or entering into any similar arrangement for the benefit of creditors;
(6) Conviction of Licensee or any Owner, the Designated Manager or a guarantor of an offense directly related to the Restaurant;
(7) Intentionally understating or underreporting Gross Sales, continuing license fees or sales promotion program fees as described in section 9.11(c);
(8) Any default by Licensee which is the third default within any consecutive 12-month period; or
(9) Licensee or an Owner is named as a specially designated national or blocked person as designated by the United States Department of the Treasury's Office of Foreign Assets Control.
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 the 2025 Dq Treat Franchise Disclosure Document, there are several defaults that a licensee cannot cure, which will lead to immediate termination of the franchise agreement upon written notice from Dq Treat. These defaults include the loss of the right to occupy the restaurant premises, which could arise from eviction or failure to maintain lease agreements.
Additionally, if the restaurant is destroyed or damaged, the licensee's failure to repair and reopen the restaurant at the authorized location within 270 days of the event also constitutes a non-curable default. Similarly, failing to relocate and reopen the restaurant as per the conditions and timeframes specified in the franchise agreement results in immediate termination. Voluntary abandonment of the restaurant, insolvency of the licensee, a principal owner, or a guarantor, or any assignment for the benefit of creditors are also non-curable defaults.
Furthermore, a conviction of the licensee, any owner, the designated manager, or a guarantor of an offense directly related to the restaurant, intentionally understating or underreporting gross sales, continuing license fees, or sales promotion program fees, any third default within a 12-month period, or being named as a specially designated national or blocked person by the United States Department of the Treasury's Office of Foreign Assets Control are all grounds for immediate termination without the possibility of cure. These terms highlight the critical importance of maintaining operational and financial integrity, as well as adherence to legal and regulatory requirements, to avoid immediate termination of the Dq Treat franchise agreement.