If Kitchen Solvers terminates a single-unit franchise agreement, does that permit them to terminate the Development Agreement?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
| | 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. | |#### B. Area Development Agreement
This table lists important provisions of the Area Development Agreement.You 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. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 36–40)
What This Means (2025 FDD)
According to Kitchen Solvers's 2025 Franchise Disclosure Document, the termination of a single-unit franchise agreement does not automatically permit Kitchen Solvers to terminate the Development Agreement (ADA). 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 end the Development Agreement if a franchise agreement has been terminated.
Specifically, the FDD outlines various scenarios under which Kitchen Solvers can terminate the Development Agreement for cause. These include both curable and non-curable defaults. Curable defaults allow the franchisee a 15-day period to rectify the issue after receiving notice. Non-curable defaults, on the other hand, permit Kitchen Solvers to terminate the ADA immediately upon notice. These non-curable defaults include failing to meet minimum development obligations, engaging in conduct that harms the brand's goodwill, termination of any franchise agreement, uncured default under any franchise agreement, violating confidentiality or non-competition covenants, and failing to cure any other default within 15 days after notice.
For a prospective Kitchen Solvers franchisee, this distinction is critical. While the termination of a single franchise agreement doesn't automatically end the Development Agreement, Kitchen Solvers has the power to terminate the ADA if any franchise agreement is terminated. This highlights the importance of adhering to the terms of all agreements and addressing any defaults promptly to avoid potential termination of both the franchise and development rights. Franchisees should carefully review the conditions under which Kitchen Solvers can terminate the Development Agreement, particularly those related to franchise agreement terminations and non-curable defaults, to fully understand their obligations and potential risks.