Under what conditions can Kitchen Solvers terminate the Development Agreement with cause?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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, Kitchen Solvers can terminate the Development Agreement with cause under specific circumstances, as detailed in Section 5.2 of the Development Agreement. These circumstances are divided into defaults that can be cured and those that are non-curable.
For curable defaults, if a franchisee commits a default under the Development Agreement (excluding non-curable defaults), they have 15 days after receiving notice from Kitchen Solvers to correct the identified default. However, for non-curable defaults, Kitchen Solvers has the right to terminate the Development Agreement immediately upon notice. These non-curable defaults, considered '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 entered into with Kitchen Solvers or its affiliates, violating confidentiality or non-competition covenants, and failing to cure any other default within 15 days after notice.
It is important to note that the termination of the Development Agreement does not automatically permit Kitchen Solvers to terminate a single-unit franchise agreement. However, Kitchen Solvers retains the right to terminate the Development Agreement if they have terminated a franchise agreement entered into between the franchisee and Kitchen Solvers. This distinction is crucial for prospective franchisees to understand, as the conditions for terminating the Development Agreement are separate from those for terminating a single-unit franchise agreement.