If Kitchen Solvers terminates a single-unit franchise agreement, does that automatically permit them to terminate the Development Agreement?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
u should read these provisions in the Area Development Agreement attached to this FDD.**
| Provision | Section in Development Agreement | Summary |
|---|---|---|
| a. Term of the franchise | Section 5.1 | Commences on the date of the ADA is signed and ends on the last Development Deadline of the Mandatory Development Schedule. |
| b. Renewal or | Section 5.1 | The ADA is not subject to renewal. |
| extension of the term | ||
| c. Requirements for you to renew or | None | N/A |
| extend | ||
| d. Termination by you | None | N/A (subject to state law) |
| 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. |
| Provision | Section in Development | Summary |
| -------------------------------------------------------------------- | --------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| 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. |
| i. Your obligations on | Section 5.3, Section 7.1.2, 7.3 | Comply with covenants and all post-term obligations of |
| termination/nonrenewal | the Development Agreement. | |
| j. Assignment of | Section 6.1 | No restriction on our right to assign. |
| contract by us | ||
| k. "Transfer" by you – definition | Section 6.2 | Includes transfer of the ADA or your ownership change. |
| l. Our approval of transfer by you | Section 6.2 | You are not permitted to assign or transfer the ADA. |
| m. Conditions for our approval of | Not applicable | You have no right to transfer or assign the ADA. |
| transfer | ||
| n. |
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, the termination of a single-unit franchise agreement does not automatically allow Kitchen Solvers to terminate the Development Agreement. However, Kitchen Solvers retains the right to terminate the Development Agreement if they have terminated a franchise agreement between the franchisee and Kitchen Solvers. This means that while the termination of one agreement doesn't automatically trigger the end of the other, Kitchen Solvers can choose to terminate the Development Agreement following the termination of the franchise agreement. This provision is detailed within Section 5.2 of the Development Agreement, which outlines the conditions for termination with cause.
This clause has significant implications for a prospective Kitchen Solvers franchisee who also enters into a Development Agreement. It means that if Kitchen Solvers terminates a franchise agreement with the franchisee for any reason, Kitchen Solvers has the option to also terminate the Development Agreement. This could impact the franchisee's plans for future expansion and development within their designated area, as the Development Agreement outlines the schedule and obligations for opening additional Kitchen Solvers locations.
It is important for a potential Kitchen Solvers franchisee to understand the circumstances under which a franchise agreement can be terminated, as this could trigger the termination of the Development Agreement as well. The FDD outlines various causes for termination, including both curable and non-curable defaults. Franchisees should carefully review these provisions and ensure they understand their obligations under both the Franchise Agreement and the Development Agreement to avoid potential termination.
In summary, while the termination of a single-unit franchise agreement does not automatically lead to the termination of the Development Agreement, Kitchen Solvers has the right to terminate the Development Agreement if a franchise agreement has been terminated. This interdependency between the agreements highlights the importance of compliance and careful management of the franchise to maintain the Development Agreement.