What is an Ella Cafe franchisee required to do upon the occurrence of an event of Force Majeure?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Upon the occurrence of an event of Force Majeure, the party affected thereby must give prompt notice thereof to the other party, together with a description of the event, the duration for which the party expects its ability to comply with the provisions of the Agreement to be affected, and a plan for resuming operation under the Agreement, which the party must promptly undertake and maintain with due diligence.
Such affected party will be liable for failure to give timely notice only to the extent of damage actually caused.
If an event of Force Majeure occurs, then Developer will continue to be obligated to pay to Franchisor any and all amounts it is obligated to pay in accordance with the terms of this Agreement prior to the occurrence of such event, and the Indemnitees will continue to be indemnified and held harmless by Developer in accordance with Section 7.2.
Except as provided in the immediately preceding sentence, neither party will be held liable for a failure to comply with any terms and conditions of this Agreement when such failure is caused by an event of Force Majeure.
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, if a Force Majeure event occurs, the affected party must promptly notify the other party. This notice should include a description of the event, how long the party anticipates the event will impact their ability to comply with the agreement, and a plan for resuming operations, which the party must then diligently pursue. Failure to provide timely notice will result in liability for any damages caused by the delay.
Even during a Force Majeure event, the Ella Cafe franchisee remains obligated to pay any amounts owed to the franchisor as per the agreement terms before the event. Additionally, the franchisee must continue to indemnify and hold harmless the Indemnitees as outlined in Section 7.2 of the agreement. Except for these specific obligations, neither party will be held liable for failing to meet the agreement's terms and conditions if the failure is directly caused by the Force Majeure event.
In the context of the Ella Cafe franchise agreement, "Force Majeure" includes events such as natural disasters (tornadoes, earthquakes, hurricanes, floods, fire), industrial disturbances (strikes, lockouts), war, terrorist acts, riots, civil disturbances, epidemics, and national pandemics. These are events that the franchisee could not have avoided with reasonable diligence. However, financial inability or insolvency of the franchisee does not qualify as a Force Majeure event. Similarly, actions or failures to act by governmental authorities, or the performance or non-performance of rights by lenders or landlords, are not considered Force Majeure events unless they directly result from an event that would otherwise qualify as Force Majeure.