Under the Hawaiian Bros Island Grill franchise agreement, what constitutes an 'Event of Default'?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
If any of the following events or conditions occurs (each, an "Event of Default"), Developer will be in default under this Agreement:
(a) Developer fails to sign an approved lease for any Hawaiian Bros Restaurant in compliance with Section 3 on or before the date which is 180 days before the applicable Development Period End Date (considering any extension of that date that Developer obtains under Section 5(a));
(b) Developer signs a lease without express written authorization from Company or otherwise proceeds with a Hawaiian Bros Restaurant's development before signing a Franchise Agreement for the Restaurant;
(c) Developer fails to open any Hawaiian Bros Restaurant in compliance with Section 3 on or before the applicable Development Period End Date (considering any extension of that date that Developer obtains under Sections 5(a));
(d) Without Company's express prior written permission, Developer fails to have open and operating in the Development Area the cumulative total number of Hawaiian Bros Restaurants indicated in the "Required # of Operating Hawaiian Bros Restaurants" column of Exhibit B as of the Development Period End Date of the applicable Development Period (considering any extension of the Development Period End Date for a particular Hawaiian Bros Restaurant that Developer obtains under Sections 5(a));
Source: Item 23 — RECEIPTS (FDD pages 77–262)
What This Means (2025 FDD)
According to the 2025 Hawaiian Bros Island Grill Franchise Disclosure Document, an 'Event of Default' for a developer includes specific failures related to leases and restaurant openings. These events trigger the developer being in default under the Development Agreement.
Specifically, an Event of Default occurs if the developer fails to sign an approved lease for any Hawaiian Bros Restaurant within 180 days before the applicable Development Period End Date, considering any extensions. It also includes signing a lease without express written authorization from Hawaiian Bros Island Grill or proceeding with development before signing a Franchise Agreement. Failing to open any Hawaiian Bros Restaurant by the Development Period End Date, including extensions, also constitutes a default.
Furthermore, an Event of Default occurs if the developer fails to have the required cumulative number of Hawaiian Bros Restaurants open and operating in the Development Area by the Development Period End Date, without express prior written permission from Hawaiian Bros Island Grill. These stipulations ensure that developers adhere to the agreed-upon development schedule and maintain communication with the franchisor throughout the process. Hawaiian Bros Island Grill retains the right to take action if any of these defaults occur, as detailed in the Development Agreement.