What is the Franchise Agreement for Endless Summer Sweets related to the Multi-Unit Development Agreement?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
ee may, after giving reasonable prior notice to Landlord, enter the Leased Premises to remove signs and other material bearing Franchisor's brand name, trademarks, and commercial symbols, provided that Franchisor will be liable to Landlord for any damage Franchisor or its designee causes by such removal.
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- No Liability. By executing this Rider, Franchisor does not assume any liability with respect to the Leased Premises or any obligation as Tenant under the Lease.
Executed by:
LANDLORD: TENANT:
EXHIBIT C TO DISCLOSURE DOCUMENT
MULTI-UNIT DEVELOPMENT AGREEMENT
This Multi-Unit Development Agreement (this "MUDA") is made between Endless Summer Sweets Franchising, Inc. ("Franchisor") and , a ("Franchisee") on the Effective Date. Background Statement: On the same day as they executed this MUDA, Franchisor and Franchisee have into Franchise Agreement for the franchise of entered a a business (the "Franchise Agreement;" capitalized terms used but not defined in this MUDA have the meanings given in the Franchise Agreement). Franchisor and Franchisee desire that Franchisee multiple businesses. 1. Multi-Unit Commitment. (a) Development Schedule; Fee. Franchisee shall develop and open businesses on the following schedule:
| Location # | Deadline for Opening | Total Restaurants to be Open and Operating on Deadline | Initial Franchise Fee |
|---|---|---|---|
| 1 | 1 | $ | |
| 2 | 2 | $ | |
| 3 | 3 | $ | |
| 4 | 4 | $ | |
| 5 | Total Initial Franchise Fee: | 5 | $ |
- (b) Payment**.** Upon execution of this MUDA, Franchisee shall pay the total Initial Franchise Fees to Franchisor. The Initial Franchise Fees are non-refundable.
- 2. Form of Agreement. For the first location, Franchisee and Franchisor have executed the Franchise Agreement simultaneously with this MUDA. For each additional franchise, Franchisee shall execute Franchisor's then-current standard form of franchise agreement no later than three business days after Franchisee leases or acquires a location for the franchise. This MUDA does not give Franchisee the right to construct, open, or operate an Endless Summer Sweets business, and Franchisee acknowledges that Franchisee may construct, open, and operate each Endless Summer Sweets business only pursuant to a separate franchise agreement executed pursuant to this MUDA for each Endless Summer Sweets business.
| 3. | Development Area. Franchisee shall locate each Endless Summer Sweets business it develops under this MUDA within the following area: | ||
|---|---|---|---|
| effect | (the "Development Area"). Franchisee has | ||
| exclusive rights to develop, open or | |||
| operate Endless Summer Sweets businesses in the Development Area | |||
| while this agreement is in | |||
| 4. | Default and Termination. Franchisor may terminate this MUDA by giving notice to | ||
| Franchisee, without opportunity to cure, if any of the following occur: | |||
| (i) | Franchisee fails to satisfy the development schedule; or | ||
| (ii) | Franchisor has the right to terminate any franchise agreement between Franchisor | ||
| and Franchisee (or any affiliate thereof) due to Franchisee's default thereunder | |||
| (whether or not Franchisor actually terminates | |||
| such franchise agreement). | |||
| 5. | Limitation of Liability. Franchisee's | ||
| commitment to develop Endless Summer Sweets | |||
| businesses is in the nature of an option only. If Franchisor terminates this MUDA for Franchisee's | |||
| default, Franchisee shall not be liable to Franchisor for lost future revenues or profits from the | |||
| unopened Endless Summer Sweets | |||
| businesses. | |||
| 6. | Conditions. |
Source: Item 23 — RECEIPTS (FDD pages 39–125)
What This Means (2024 FDD)
According to the 2024 Endless Summer Sweets Franchise Disclosure Document, the Multi-Unit Development Agreement (MUDA) is connected to the Franchise Agreement. On the same day that the MUDA is executed, the franchisee and Endless Summer Sweets enter into a Franchise Agreement for the franchise of a business. The document specifies that capitalized terms not defined in the MUDA have the meanings given in the Franchise Agreement. This indicates that the Franchise Agreement and the MUDA are intended to be signed together and operate in conjunction with one another.
This setup is typical for multi-unit franchise opportunities, where a franchisee commits to opening multiple locations. The MUDA outlines the development schedule and the area in which the franchisee must develop these Endless Summer Sweets businesses. The Franchise Agreement, on the other hand, governs the operation of each individual franchise unit. The MUDA grants the franchisee exclusive rights to develop and operate Endless Summer Sweets businesses within a defined Development Area, so long as the agreement remains in effect.
Endless Summer Sweets can terminate the MUDA if the franchisee fails to meet the development schedule or if Endless Summer Sweets has the right to terminate any franchise agreement with the franchisee due to default. The franchisee's commitment to develop Endless Summer Sweets businesses is treated as an option, limiting liability for lost future revenues if the MUDA is terminated due to the franchisee's default. The franchisee's right to develop each franchise after the first is conditional upon having sufficient financial and organizational capacity and being in full compliance with brand requirements and not in default under any agreement with Endless Summer Sweets.
Furthermore, the laws of California govern any disputes related to the MUDA. The dispute resolution and miscellaneous provisions of the Franchise Agreement are incorporated into the MUDA, meaning that aspects like mediation, choice of law, and other legal terms from the Franchise Agreement also apply to the MUDA. The franchisee cannot transfer the MUDA without prior written consent from Endless Summer Sweets, and any transfer without this consent is void.