Does a Monicals Pizza developer have a right of first refusal?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Agreement.
5.2 Developer's Right of Refusal
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.
6. MARKS AND CONFIDENTIAL INFORMATION
6.1 No License Under Development Agreement
Notwithstanding any provision to the contrary under this Development Agreement, this Development Agreement does not grant Developer any right to use the Marks. The right to use the Marks may only be granted by the terms of a Franchise Agreement. Developer shall not use any Mark as part of any corporate or trade name or with any prefix, suffix, or other modifying words, terms designs, or symbols, or in any modifying words, terms designs or symbols, or in any modified form, nor may Developer use any Mark in connection with any business or activity other than the business conducted by Developer pursuant to a Franchise Agreements or in any other manner not explicitly authorized in writing by Franchisor.
6.2 Confidential Information
Except as hereinafter provided, Developer shall not, during the term of this Development Agreement or at any time thereafter, communicate, divulge or use for the benefit of any other person or entity, any Trade Secrets or other Confidential Information which may be communicated to Developer or of which Developer may learn by virtue of Developer's activities under this Development Agreement. Developer may divulge Trade Secrets and other Confidential Information only to such of its employees as deemed necessary by Developer. At Franchisor's request, Developer shall require its employees and any other person to whom Developer wishes to disclose any Trade Secrets or other Confidential Information to execute a nondisclosure agreement in a form the same as or similar to the Nondisclosure and Non-Competition Agreement attached to the Initial Franchise Agreement ("Nondisclosure and Non-Competition Agreement").
7.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, a developer may have a right of first refusal under certain conditions. Specifically, following the expiration of the Development Agreement, Monicals Pizza has the right to reevaluate the prospects for establishing more restaurants in the Development Territory.
During a one-year period after the Development Agreement expires, if Monicals Pizza decides to further develop the territory, the developer has the right to establish, own, and operate any additional Monicals Pizza restaurant that Monicals Pizza proposes to locate within the Development Territory, provided the developer meets all other terms and conditions of the Development Agreement.
Monicals Pizza must give 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 developer's ownership and operation of these additional restaurants will be set forth in Monicals Pizza's written proposal, which may differ from the original Development Agreement. If the developer fails to accept the proposal within 30 days or fails to comply with its terms, Monicals Pizza has the right to establish, own, and operate, or license others to do so, Monicals Pizza restaurants in the Development Territory.
Additionally, if the developer or its owners decide to sell, assign, transfer, convey, give away, or encumber the Development Rights, Monicals Pizza has a right of first refusal to purchase these interests at the price and terms of a bona fide offer obtained by the developer. Monicals Pizza has 30 days from the date of delivery of the offer to exercise this right, and at least 60 days to complete the purchase. If Monicals Pizza does not exercise this right, the developer may complete the sale, subject to other conditions, within 120 days after delivering the offer. After that, Monicals Pizza's right of first refusal is reinstated.