Under what condition is a waiver by Face Foundrie of a default by the Area Developer binding?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
No failure of Franchisor to exercise any power reserved to it hereunder, or to insist upon strict compliance by Area Developer with any obligation or condition hereunder, and no custom or practice of the parties in variance with the terms hereof, shall constitute a waiver of Franchisor's right to demand exact compliance with the terms hereof. Waiver by Franchisor of any particular default by Area Developer shall not be binding unless in writing and executed by the party sought to be charged and shall not affect or impair Franchisor's right with respect to any subsequent default of the same or of a different nature; nor shall any delay, waiver, forbearance, or omission of Franchisor to exercise any power or rights arising out of any breach or default by Area Developer of any of the terms, provisions, or covenants hereof, affect or impair Franchisor's rights nor shall such constitute a waiver by Franchisor of any right hereunder or of the right to declare any subsequent breach or default. Subsequent acceptance by Franchisor of any payment(s) due to it hereunder shall not be deemed to be a waiver by Franchisor of any preceding breach by Area Developer of any terms, covenants or conditions of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 74–257)
What This Means (2025 FDD)
According to the 2025 Face Foundrie Franchise Disclosure Document, a waiver by Face Foundrie of any particular default by the Area Developer is only binding if the waiver is in writing and executed by the party sought to be charged. This means that for a waiver to be effective, Face Foundrie must provide a written document explicitly stating that they are waiving their right to act on a specific default by the Area Developer, and Face Foundrie must sign this document. This requirement ensures that there is clear, documented evidence of the waiver, protecting both parties.
This clause also specifies that a waiver of a specific default does not prevent Face Foundrie from enforcing its rights regarding any subsequent defaults, whether of the same nature or a different one. In other words, if Face Foundrie waives its right to act on one instance of a default, it does not give up its right to act on future instances of that default or any other type of default. Additionally, any delay, waiver, forbearance, or omission by Face Foundrie to exercise any power or rights arising out of any breach or default by the Area Developer does not affect or impair Face Foundrie's rights, nor does it constitute a waiver of any right or the right to declare any subsequent breach or default.
Furthermore, the FDD states that subsequent acceptance by Face Foundrie of any payment(s) due to it does not constitute a waiver of any preceding breach by the Area Developer of any terms, covenants, or conditions of the agreement. This means that even if Face Foundrie continues to accept payments from the Area Developer after a breach has occurred, it does not forfeit its right to take action regarding that prior breach. This provision protects Face Foundrie's ability to address breaches even while maintaining the ongoing business relationship.
For a prospective Face Foundrie Area Developer, this non-waiver clause highlights the importance of strict compliance with the Area Development Agreement. Even if Face Foundrie appears lenient or does not immediately enforce its rights, it retains the right to do so in the future. Therefore, Area Developers should not rely on past leniency as an indication that future defaults will be overlooked. It is crucial to maintain open communication with Face Foundrie and address any potential defaults promptly to avoid future disputes.