Is a Multi-Unit Development Agreement included in the Endless Summer Sweets franchise offering?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
If you sign a Multi-Unit Development Agreement you will develop multiple Endless Summer Sweets restaurant outlets, on an agreed-upon schedule. Our form of Multi-Unit Development Agreement is attached as Exhibit C to this disclosure document. For each franchise after the first, we will require you to sign our then-current form of franchise agreement, which may be different from the form of franchise agreement included in this disclosure 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.
If you sign a MUDA, you will receive an exclusive territory as an area developer. In your territory, we will not establish either a company-owned or franchised outlet selling the same or similar goods or services under the same or similar trademarks or service marks as a Endless Summer Sweets outlet. The continuation of your territorial exclusivity depend on your adherence to the development schedule states in the MUDA. If you fail to adhere to the development schedule, we will have the right to terminate your MUDA, but not any franchise agreements that are already signed.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
Yes, according to Endless Summer Sweets's 2024 Franchise Disclosure Document, a Multi-Unit Development Agreement (MUDA) is part of their franchise offering. The FDD states that if you sign a Multi-Unit Development Agreement with Endless Summer Sweets, you will be granted the right to develop multiple Endless Summer Sweets restaurant outlets based on an agreed-upon schedule. The form for this agreement is included as Exhibit C to the FDD.
The FDD specifies that to develop additional outlets under a MUDA, franchisees must adhere to the development schedule, possess sufficient financial and organizational capacity to manage each new Endless Summer Sweets restaurant, comply with all brand requirements at their existing locations, and avoid defaulting on any agreements with Endless Summer Sweets. The franchisor retains approval rights over the locations and territories for these additional sites, ensuring they meet the current standards.
While franchisees are not obligated to develop additional outlets under the MUDA and can terminate it without penalty, Endless Summer Sweets reserves the right to terminate the franchisee's development rights if the development schedule is not met. Furthermore, if a franchisee signs a MUDA, they will receive an exclusive territory as an area developer, where Endless Summer Sweets will not establish company-owned or franchised outlets selling similar goods or services under the same trademarks. However, this territorial exclusivity is contingent upon adhering to the development schedule outlined in the MUDA.