If Kitchen Solvers terminates a franchise agreement, what right does Kitchen Solvers have regarding the development agreement?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
| e. Termination by us without cause | None | Termination of Development Agreement does not permit us to terminate a single-unit franchise agreement. We do have the right to terminate the development agreement if we have terminated a franchise agreement entered into between you and us. | | f. Termination by us with cause | Section 5.2 | We can terminate you for cause. Termination of Development Agreement does not permit us to terminate a single-unit franchise agreement. We do have the right to terminate the development agreement if we have terminated a franchise agreement entered into between you and us. | | g. "Cause" defined – defaults which can be cured | Agreement Section 5.2 | If you commit a default under the ADA (other than the type of default disclosed in (h) below, which defaults are non-curable), you have 15 days after you receive notice from us to cure the default identified in the notice. Termination of Development Agreement does not permit us to terminate a single-unit franchise agreement. We do have the right to terminate the development agreement if we have terminated a franchise agreement entered into between you and us. | | h. "Cause" defined – non-curable defaults | Section 5.2 | We have the right to terminate the ADA effective immediately on notice to you if you commit a Material Default, including: (i) you fail to meet your Minimum Development Obligations; (ii) you commit any conduct that impairs the goodwill associated with the marks or otherwise causes harm to us or the reputation of the brand or the System; (iii) the termination of any Franchise Agreement entered into by you or any of your affiliates and us and any of our affiliates; (iv) uncured default under any such Franchise Agreement; (v) violation of the confidentiality and/or non-competition covenants; and (vi) failure to cure any other default within 15 days after notice. Termination of Development Agreement does not permit us to terminate a single-unit franchise agreement. We do have the right to terminate the development agreement if we have terminated a franchise agreement entered into between you and us.
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 36–40)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, if Kitchen Solvers terminates a franchise agreement with a franchisee, Kitchen Solvers retains the right to terminate the development agreement as well. This applies whether the termination of the franchise agreement is with or without cause.
This provision in the development agreement is significant for prospective Kitchen Solvers franchisees who are also development agents. It means that if Kitchen Solvers terminates a unit franchise agreement, the franchisee risks losing not only that franchise but also their rights to develop additional Kitchen Solvers franchises in their designated area.
This clause could have serious implications for a franchisee's investment and business plans. Franchisees should carefully consider the conditions under which Kitchen Solvers can terminate a franchise agreement and understand the potential ramifications for their broader development agreement. It is important to note that the termination of the Development Agreement does not permit Kitchen Solvers to terminate a single-unit franchise agreement.