What constitutes an event of default under the Hawaiian Bros Island Grill Development Agreement?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
Your Development Agreement will contain a schedule of the dates by which you must open each Restaurant to be developed under the Development Agreement. The Development Agreement requires you to sign a separate Franchise Agreement for each Restaurant. The first Franchise Agreement you sign will be substantially the same form of Franchise Agreement that was disclosed in the disclosure document you received before signing the Development Agreement, but all additional Franchise Agreements you sign for additional Hawaiian Bros Island Grill Restaurants will be our then-current form of Franchise Agreement. That form may differ from the form of Franchise Agreement included in this disclosure document. The Development Agreement only governs your development rights; it grants no operating rights and is not the equivalent of a franchise for the Development Area. Your failure to adhere to the Development Agreement's development schedule will be an event of default under the Development Agreement.
Source: Item 12 — TERRITORY (FDD pages 49–53)
What This Means (2025 FDD)
According to the 2025 Hawaiian Bros Island Grill Franchise Disclosure Document, a failure to adhere to the development schedule outlined in the Development Agreement constitutes an event of default. This means that if a franchisee does not open restaurants by the dates specified in their development schedule, Hawaiian Bros Island Grill can declare them in default.
If a franchisee defaults under the Development Agreement, Hawaiian Bros Island Grill has several options. They may eliminate the franchisee's protected development rights in the Development Area, allowing Hawaiian Bros Island Grill to develop or permit others to develop restaurants in that area. Hawaiian Bros Island Grill can also decrease the number of restaurants the franchisee is required to develop, reduce the size of the Development Area, or terminate all of the franchisee's rights under the Development Agreement. Hawaiian Bros Island Grill gets to choose whichever option they prefer.
While Hawaiian Bros Island Grill may offer an opportunity to cure a default, they are not obligated to do so. This means that franchisees need to be diligent in meeting their development obligations to avoid the potential loss of their development rights and investment. Prospective franchisees should carefully review the development schedule and ensure they have the resources and capabilities to meet the required timelines before signing the Development Agreement.