What constitutes a 'Material Default' that would allow Kitchen Solvers to terminate the Development Agreement?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the right to terminate this Agreement, effective immediately upon delivery of written notice to you, if you commit a Material Default under this Agreement.
Each of the following events shall be deemed a "Material Default" under this Agreement:
- (a) Your failure to meet any of your Minimum Development Obligations.
- (b) Any conduct on your part that impairs the goodwill associated with the marks or otherwise causes harm to us or the reputation of the brand or System.
- (c) The termination of any Franchise Agreement entered into by and between Franchisor, its successors or assigns, and you and/or any Developer Affiliate.
- (d) If you or any Developer Affiliate commits a default under any Franchise Agreement or other agreement between us and you or any Developer Affiliate, which default remains uncured beyond all applicable notice and cure periods.
- (e) If you violate any of your confidentiality or non-competition obligations under this Agreement.
- (f) If you default under any other obligation under this Agreement and such default is not cured before the expiration of fifteen (15) calendar days following your receipt of a written notice of default from us.
A termination of this Agreement is not deemed to be a termination of any Franchise Agreement entered into by and between you and us, or any Developer Affiliate and us. You shall not be entitled to any refund of any of the Development Fee if we terminate this Agreement in accordance with the terms hereof.
Source: Item 23 — Receipts (FDD pages 49–190)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, several events are considered a 'Material Default' that would allow Kitchen Solvers to terminate the Area Development Agreement immediately by providing written notice. These include failing to meet the minimum development obligations outlined in the agreement, engaging in any conduct that damages the goodwill associated with Kitchen Solvers' marks or harms the brand's reputation, or the termination of any Franchise Agreement between Kitchen Solvers and the developer or any Developer Affiliate.
Additionally, a 'Material Default' occurs if the developer or any Developer Affiliate defaults under any Franchise Agreement or other agreement with Kitchen Solvers, and the default remains uncured after all applicable notice and cure periods. Violating confidentiality or non-competition obligations as defined in the Area Development Agreement also constitutes a 'Material Default.' Finally, defaulting on any other obligation under the Area Development Agreement that remains uncured for more than fifteen calendar days after receiving written notice from Kitchen Solvers is also considered a 'Material Default'.
It is important to note that the termination of the Area Development Agreement does not automatically terminate any existing Franchise Agreements between the developer and Kitchen Solvers. Furthermore, if Kitchen Solvers terminates the Area Development Agreement due to a 'Material Default,' the developer is not entitled to a refund of any portion of the Development Fee. This highlights the importance of understanding and adhering to all terms and conditions of the Area Development Agreement to avoid potential termination and financial loss.