Under what conditions can Kitchen Solvers terminate the Area Development Agreement with cause?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. |
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, Kitchen Solvers can terminate the Area Development Agreement (ADA) with cause under specific conditions, as detailed in Section 5.2 of the Development Agreement. These conditions are divided into defaults that can be cured and those that are non-curable. If a franchisee commits a curable default under the ADA, Kitchen Solvers will provide a 15-day notice to cure the default. Failure to remedy the default within this period allows Kitchen Solvers to terminate the agreement.
Kitchen Solvers can terminate the ADA immediately upon notice if a franchisee commits a Material Default, which is non-curable. Material Defaults include failing to meet Minimum Development Obligations, engaging in conduct that impairs the goodwill associated with Kitchen Solvers' marks or harms the brand's reputation, termination or uncured default of any Franchise Agreement involving the franchisee or their affiliates, and violation of confidentiality or non-competition covenants.
These termination conditions are significant for prospective Kitchen Solvers area developers. The distinction between curable and non-curable defaults highlights the importance of adhering to the development schedule and maintaining the brand's integrity. The immediate termination for non-curable defaults, especially those related to brand reputation and non-competition, underscores the need for strict compliance with the agreement's terms. Additionally, the cross-default provision, where termination or default of a Franchise Agreement can trigger termination of the ADA, emphasizes the interconnectedness of the agreements and the importance of managing all aspects of the franchise relationship diligently.