Does termination of the Kitchen Solvers Development Agreement permit Kitchen Solvers to terminate a single-unit franchise 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's 2025 Franchise Disclosure Document, the termination of the Development Agreement does not, by itself, allow Kitchen Solvers to terminate a single-unit franchise agreement. However, Kitchen Solvers retains the right to terminate the Development Agreement if they have already terminated a franchise agreement between the franchisee and Kitchen Solvers. This means that the franchise agreement and the development agreement are treated as separate contracts, and the termination of one does not automatically trigger the termination of the other.
This separation provides a degree of protection for franchisees who have an existing franchise agreement. Even if the Development Agreement is terminated, the franchise agreement remains in effect unless there are separate grounds for its termination as outlined in the franchise agreement itself. This could include breaches of contract, failure to meet performance standards, or other causes specified in the franchise agreement.
Conversely, Kitchen Solvers can terminate the Development Agreement if a single-unit franchise agreement has already been terminated. This provision likely aims to prevent a developer whose franchise has been terminated from continuing to expand within their development area. It ensures that Kitchen Solvers can sever all ties with a franchisee who has failed to meet the standards of the franchise agreement.
Prospective Kitchen Solvers franchisees should carefully review the conditions under which both the Development Agreement and the Franchise Agreement can be terminated. Understanding these conditions is crucial for assessing the risks and obligations associated with both agreements. Franchisees should also seek legal counsel to fully understand their rights and responsibilities under both agreements.