What are the franchisee's obligations upon termination or non-renewal of the Marble Slab Creamery franchise?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| franchise is terminated or expires | competitive business for 2 years within 5 miles of the location of your Restaurant or any other Restaurant operated or intended to be operated under the Marks. | ||
| s. | Modification of the agreement | Section 20 | Except for changes we can make, no amendment without mutual written consent |
| t. | Integration/merger clause | Section 25 | Only terms of Franchise Agreement are binding (subject to state law). Any representations or promises outside of the disclosure document and franchise agreement may not be enforceable. |
| u. | Dispute resolution by arbitration or mediation | Section 21 | Subject to state law, except for certain claims, all disputes must be arbitrated in the county in which our headquarters are located (currently Los Angeles, California) |
| v. | Choice of forum | Section 21 | Subject to state law, arbitration in the county in which our headquarters is located (currently Los Angeles, California) |
| w. | Choice of law | Section 21 | California; if a provision is unenforceable under California law, then laws of the state in which the Restaurant is located apply to that provision. Any dispute between the parties must be brought or instituted within 1 year from the date of discovery of the conduct or event that is the basis of the legal action or proceeding. |
| Provision | Section in Multi- Unit Restaurant Agreement | Summary subject to notice and cure provisions in the other agreement. | |
| i. | Your obligations on termination/non- renewal | Section 4.3 | You will have no further right to develop or operate additional Restaurants which are not, at the time of termination, the subject of a then existing Franchise Agreement between you and us. You may continue to own and operate all Restaurants pursuant to then- existing Franchise Agreements, |
| j. | Assignment of contract by MSC | Section 7.1 | No restriction on our right to assign. |
| k. | “Transfer” by you – definition | Section 7.3 | Includes transfer of the agreement, changes in ownership of the entity which owns it. |
| l. | MSC’s approval of transfer by you | Section 7.3 | Transfers require our express written consent, which may be withheld for any reason whatsoever, in our sole and absolute discretion. |
| m. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 74–85)
What This Means (2025 FDD)
According to the 2025 Marble Slab Creamery FDD, the franchisee's obligations upon termination or non-renewal vary depending on the agreement in place. If the franchisee has a Multi-Unit Restaurant Agreement, they will no longer have the right to develop or operate additional restaurants that are not already subject to an existing Franchise Agreement. However, they can continue to own and operate restaurants under existing Franchise Agreements. Additionally, under the Multi-Unit Restaurant Agreement, the franchisee is subject to a non-competition covenant for two years, preventing them from opening, operating, advising, or having a financial interest in any restaurant that is the same or similar to a Marble Slab Creamery restaurant without express written consent.
If the franchisee has an LLC Operating Agreement, the manager of the LLC is responsible for winding up the affairs of the LLC, which includes paying all debts and distributing or liquidating any remaining assets to the members.
It is important for prospective Marble Slab Creamery franchisees to carefully review the specific terms of each agreement to fully understand their obligations upon termination or non-renewal, as these obligations can significantly impact their future business activities and financial responsibilities.