Under what section of the Ella Cafe agreement is a developer's failure to adhere to the Development Schedule considered a default?
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 is considered a default under Section 9.2 of the agreement. This is explicitly stated within the section outlining the Development Schedule.
This means that if a developer fails to meet the milestones outlined in the Development Schedule, Ella Cafe has grounds to declare a default. This is a significant point for prospective developers as it ties their development obligations directly to the potential for default and subsequent actions by the franchisor.
Section 9.2 further specifies that in the event of failing to adhere to the Development Schedule, Ella Cafe has the right to terminate the agreement, and such termination becomes effective immediately upon delivery of notice without an opportunity to cure the default. This lack of a cure period underscores the importance Ella Cafe places on meeting the Development Schedule and the potential risks for developers who fail to do so.