For Ella Cafe, what constitutes a default related to the Development Schedule?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Acknowledging that time is of the essence, Developer agrees to exercise its development rights according to Section 4.2. and the Development Schedule reflected in the Key Terms.
Developer's failure to adhere to the Development Schedule is a default under Section 9.2 of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, a developer's failure to adhere to the Development Schedule constitutes a default under the agreement. Specifically, this includes failing to meet the timelines outlined for developing new Ella Cafe locations as per Section 4.2 and the Development Schedule detailed in the Key Terms.
This adherence to the Development Schedule is considered critical, as time is of the essence in the agreement. If a developer fails to meet these deadlines, it triggers Section 9.2 of the agreement, leading to a default. Furthermore, if a developer ceases operation of a Coffee House, they must develop a replacement within a reasonable time, not exceeding 180 days. Failure to do so also constitutes a breach of the agreement.
Ella Cafe may choose to exercise several options if the developer fails to meet the development schedule. These options include terminating or modifying any territorial protections granted to the franchisee, reducing the size of the Development Area, or reducing the number of Coffee Houses the developer is allowed to establish under the Development Schedule. These remedies are at the sole discretion of Ella Cafe.