What is the Ella Cafe franchisee's obligation upon the occurrence of a Force Majeure event?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
ment C. Failure or refusal to do so will constitute a breach of this Agreement. Developer and each Owner will be jointly and severally liable for each other's 'obligations hereunder and under the Personal Guaranty.
- 13.7. Rules of Construction. Neither this Agreement nor any uncertainty or ambiguity in this Agreement will be construed or resolved against the drafter of this Agreement, whether under any rule of construction or otherwise. Terms used in this Agreement will be construed and interpreted according to their ordinary meaning. If any provision of this Agreement is susceptible to two or more meanings, one of which would render the provision enforceable and the other(s) which would render the provision unenforceable, the provision will be given the meaning that renders it enforceable.
- 13.8. Force Majeure. 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.
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 expects to be affected, and a plan for resuming operations under the agreement, 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 according to the agreement's 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 comply with the agreement's terms and conditions if the failure is caused by a Force Majeure event.
The agreement specifies that if either party's performance is delayed due to a Force Majeure event, the deadline for performance will be extended for a period equal to the duration of the Force Majeure, but this extension will not exceed 12 months. This clause ensures that franchisees are not penalized for delays caused by events outside their control, while also setting a reasonable limit on the extension period. Force Majeure events include acts of God, strikes, war, epidemics, and other similar forces that the franchisee could not have avoided with reasonable diligence. However, financial inability or insolvency are not considered Force Majeure events under the agreement.