Is an Endless Summer Sweets franchisee obligated to develop additional outlets under the MUDA?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
You do not have the right to establish additional franchised outlets unless you sign a Multi-Unit Development Agreement ("MUDA") in the form attached as Exhibit C to this disclosure document. If you and we sign a MUDA, then you will have the right to establish a mutually agreed number of additional outlets on a mutually agreed schedule. Under the MUDA, your right to develop additional outlets is subject to (1) you must comply with the mutually-agreed development schedule, (2) you must have sufficient financial and organizational capacity to develop, open, operate, and manage each additional Endless Summer Sweets restaurant business, (3) you must be in compliance with all brand requirements at your open Endless Summer Sweets restaurant business(es), and (4) you must not be in default under any other agreement with us. We will approve the location of future sites and territories for those sites, and our then-current standards for sites and territories will apply. You are not obligated to develop additional outlets under the MUDA, and you may terminate it any time without penalty. If you do not meet your development schedule in the MUDA, we have the right to terminate your right to develop additional outlets.
Source: Item 12 — TERRITORY (FDD pages 25–27)
What This Means (2024 FDD)
According to Endless Summer Sweets's 2024 Franchise Disclosure Document, a franchisee is not obligated to develop additional outlets even after signing a Multi-Unit Development Agreement (MUDA). The FDD states that the franchisee may terminate the MUDA at any time without penalty.
However, if the franchisee does sign a MUDA, they gain the right to establish a mutually agreed number of additional outlets based on a mutually agreed schedule. This right is contingent upon several factors: compliance with the development schedule, sufficient financial and organizational capacity to manage the additional outlets, adherence to all brand requirements at existing Endless Summer Sweets locations, and remaining in compliance with all agreements with Endless Summer Sweets.
Endless Summer Sweets retains the right to approve the locations and territories for any future sites developed under the MUDA, ensuring that the then-current standards for sites and territories are met. If a franchisee fails to meet the development schedule outlined in the MUDA, Endless Summer Sweets has the right to terminate the franchisee's right to develop additional outlets.