Within the Development Area, what must an Endless Summer Sweets franchisee do with a potential location?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
ously 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; |
Source: Item 23 — RECEIPTS (FDD pages 39–125)
What This Means (2024 FDD)
According to Endless Summer Sweets' 2024 Franchise Disclosure Document, if a franchisee has a MUDA (Multi-Unit Development Agreement), they must locate each Endless Summer Sweets business within the Development Area specified in the agreement. The franchisee has exclusive rights to develop, open, and operate Endless Summer Sweets businesses within this Development Area while the agreement is in effect.
Endless Summer Sweets also provides criteria for potential locations and will review and advise franchisees regarding locations they submit. However, the franchisor must find that the franchisee has sufficient financial and organizational capacity to develop, open, operate, and manage each additional Endless Summer Sweets business. Additionally, the franchisee must be in full compliance with all brand requirements at its open and operating Endless Summer Sweets businesses and not be in default under any Franchise Agreement or any other agreement with the franchisor.
Failure to satisfy the development schedule outlined in the MUDA can result in termination of the agreement by Endless Summer Sweets. However, if the franchisor terminates the MUDA due to the franchisee's default, the franchisee will not be liable for lost future revenues or profits from unopened Endless Summer Sweets businesses. This arrangement functions as an option for the franchisee to develop multiple units, with specific conditions and potential consequences for non-compliance.