After termination of a Dq Treat agreement, is the licensee still liable for obligations under the lease?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
14.3 Liable for Obligations. Licensee remains liable for its obligations under any applicable lease or sublease for the Restaurant premises and Authorized Location, and its other applicable obligations under this agreement or any other agreement between Licensee and Company or Company's affiliates.
14.4 Amounts Owed. Licensee must pay all sums due to Company, its affiliates or designees, or that Licensee owes to third parties which have been guaranteed by Company or any of its affiliates, within 10 days of the termination or expiration of this agreement.
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, a licensee remains liable for their obligations under any applicable lease or sublease for the restaurant premises and authorized location, even after termination of the agreement. This means that even if the franchise agreement is terminated, the franchisee is still responsible for fulfilling the terms of the lease agreement for the property where the Dq Treat business was located.
This obligation extends not only to the lease but also to other agreements between the licensee and Dq Treat or its affiliates. Additionally, the franchisee is responsible for paying all sums due to Dq Treat, its affiliates, or designees, as well as any debts to third parties guaranteed by Dq Treat or its affiliates, within 10 days of the termination or expiration of the agreement.
This provision is significant for prospective franchisees as it highlights the importance of carefully reviewing and understanding the terms of the lease agreement and other related contracts. Franchisees should be aware that termination of the franchise agreement does not automatically relieve them of their lease obligations, which could have substantial financial implications. It is advisable to seek legal counsel to fully understand these obligations and potential liabilities before entering into a franchise agreement with Dq Treat.