Under what conditions can the Endless Summer Sweets Multi-Unit Development Agreement (MUDA) be terminated?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise | Summary |
|---|---|---|
| d. Termination by | If we violate a material provision of the | |
| franchisee | franchise agreement and fail to cure or to make substantial progress toward curing the violation within 30 days after notice from you. If you sign a MUDA, you may terminate it at any time. | |
| h. “Cause” defined--non- | FA: Misrepresentation when applying to be a | |
| curable defaults | ||
| franchisee; knowingly submitting false | ||
| information; bankruptcy; lose possession of | ||
| your location; violation of law; violation of | ||
| confidentiality; violation of non-compete; | ||
| violation of transfer restrictions; slander or | ||
| libel of us; refusal to cooperate with our | ||
| business inspection; cease operations for more | ||
| than 5 consecutive days; three defaults in 12 | ||
| months; cross-termination; | ||
| conviction of, or plea to a felony, or | ||
| commission or accusation of an act that is | ||
| reasonably likely to materially and unfavorably | ||
| affect our brand; any other breach of franchise | ||
| agreement which by its nature cannot be cured. | ||
| MUDA: failure to meet development schedule; | ||
| violation of franchise agreement or other | ||
| agreement which gives us the right to terminate | ||
| it. | ||
| If you sign a Multi-Unit Development | ||
| Agreement, termination of your MUDA does | ||
| not give us the right to terminate your franchise | ||
| agreement. However, if your franchise | ||
| agreement is terminated, we have the right to | ||
| terminate your MUDA. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 30–34)
What This Means (2024 FDD)
According to Endless Summer Sweets's 2024 Franchise Disclosure Document, a franchisee has the right to terminate the Multi-Unit Development Agreement (MUDA) at any time. However, the franchisor, Endless Summer Sweets, can terminate the MUDA if the franchisee fails to meet the development schedule or violates the franchise agreement or any other agreement that gives Endless Summer Sweets the right to terminate it.
It is important to note that if the franchisee's franchise agreement is terminated, Endless Summer Sweets has the right to terminate the MUDA. Conversely, if the MUDA is terminated, it does not automatically give Endless Summer Sweets the right to terminate the franchise agreement.
These termination conditions are important for a prospective Endless Summer Sweets franchisee to consider. The franchisee has considerable freedom to terminate the MUDA, but must adhere to the development schedule and other agreements to avoid franchisor-initiated termination. The interplay between the franchise agreement and the MUDA termination rights should be carefully evaluated.