In the Ella Cafe Principal's Undertaking, what is the effect of the execution of the Principal's Undertaking on the Franchisor entering into the Agreement with the Developer?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
(a) The undersigned is a "Principal," as defined in the Agreement, and has read the terms and conditions of the Agreement and acknowledges that the execution of this Principal's Undertaking is in partial consideration for, and a condition to, Franchisor entering into the Agreement with Developer and that Franchisor would not have entered into the Agreement without
the execution of this Principal's Undertaking; and
- (b) Without limiting any of Developer's obligations under the Agreement, Principal (i) makes all of the covenants, representations, warranties, and agreements set forth in Section 5.2 (Compliance with Laws), Sections 6.1. (Confidentiality), Section 8. (Transfer of Interest), Section 10. (Covenants), and Section 14. (Applicable Law; Dispute Resolution) of the Agreement and is obligated to perform thereunder; and (ii) represents that each and every representation of Franchisee made in connection with the Agreement is true, correct, and complete in all respects as of the time given and as of the time of the undersigned's execution of this Principals' Undertaking.
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- The obligations of Principal are independent of the obligations of Franchisee, and a separate action or actions may be brought and prosecuted against Principal, whether or not actions are brought against Franchisee or whether or not Franchisee is joined in any such action.
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- This Principal's Undertaking is governed by and interpreted in accordance with the laws of the State of Florida, without regard to its conflicts of law principles. This Principal's Undertaking is enforceable by and against the respective administrators, executors, successors, and assigns of the Principal, and the death of any Principal will not terminate the liability of such Principal or limit the liability of other Principals hereunder.
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, the execution of the Principal's Undertaking is a partial consideration for Ella Cafe entering into the agreement with the developer. Moreover, it is a condition that Ella Cafe would not have entered into the agreement without the execution of the Principal's Undertaking.
The Principal's Undertaking also stipulates that the Principal agrees to certain covenants, representations, warranties, and agreements outlined in specific sections of the agreement, including compliance with laws, confidentiality, transfer of interest, covenants, and applicable law/dispute resolution. The Principal also represents that all representations made by the franchisee are true, correct, and complete.
The obligations of the Principal are independent of the obligations of the franchisee, meaning Ella Cafe can pursue separate legal actions against the Principal regardless of actions taken against the franchisee. The Principal's Undertaking is governed by Florida law and is enforceable against the Principal's administrators, executors, successors, and assigns, and the death of a Principal does not terminate their liability.