What condition must the Developer meet to exercise their right to establish, own, and operate additional Monicals Pizza Restaurants if the Franchisor proposes to locate them within the Development Territory?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Following the expiration of this Development Agreement, Franchisor shall have the right to reevaluate the prospects for the establishment of Monical's Restaurants in the Development Territory, and Franchisor may determine that the Development Territory can be further developed by opening additional Monical's Restaurants in the Development Territory without having an unreasonably adverse effect on the Monical's Restaurants already existing within the Development Territory. During a one (1) year period beginning on the day after the Development Agreement expires, if Franchisor elects to further develop the Development Territory, Developer shall have the right to establish, own and operate any additional Monical's Restaurant Franchisor proposes to locate within the Development Territory, if Developer meets all other terms and conditions stated in this Development Agreement. Franchisor shall give Developer written notice of its proposal to develop additional Monical's Restaurants within the Development Territory and Developer shall have thirty (30) days to accept in writing Franchisor's proposal to own and operate such additional Monical's Restaurants. Developer's ownership and operation of such additional Monical's Restaurants shall be subject to the terms and conditions set forth in Franchisor's written proposal, which may vary in form and substance from the terms, conditions and economics set forth in this Development Agreement. If Developer fails to accept in writing Franchisor's written proposal within such thirty (30) day period (or if Developer fails to comply with the terms of the proposal), then Franchisor shall have the right to establish, own and operate, or license others to establish, own and operate, Monical's Restaurants in the Development Territory.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, following the expiration of the Development Agreement, the Developer has a right of first refusal to establish, own, and operate additional Monicals Pizza restaurants within the Development Territory if the Franchisor decides to further develop the area. This right extends for one year after the Development Agreement expires. To exercise this right, the Developer must meet all other terms and conditions stated in the Development Agreement.
Monicals Pizza must provide the Developer written notice of its proposal to develop additional restaurants, and the Developer has 30 days to accept the proposal in writing. The terms and conditions for the new restaurants may differ from those in the original Development Agreement.
If the Developer fails to accept the proposal within the 30-day period or fails to comply with the terms of the proposal, Monicals Pizza has the right to establish, own, and operate, or license others to do so, Monicals Pizza restaurants in the Development Territory. This clause ensures that Monicals Pizza can continue to expand its presence even if the original developer is unable or unwilling to do so, while also giving the developer the first opportunity to grow within their territory.