What financial conditions, such as bankruptcy or insolvency, can lead to the termination of a Monicals Pizza franchise agreement?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 16.2.1.11, which terminates the Franchise Agreement upon the bankruptcy of the Franchisee, may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, et understands and consents to be bound by all of its terms. IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Addendum, and MONICAL PIZZA CORPORATION:
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, Section 16.2.1.11 of the Franchise Agreement allows Monicals Pizza to terminate the agreement if the franchisee declares bankruptcy. However, the FDD includes an addendum specific to Virginia stating that this clause regarding termination upon bankruptcy may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, et seq.).
This means that while Monicals Pizza's standard agreement includes bankruptcy as a cause for termination, federal law and state-specific addenda may override this provision. A prospective franchisee should be aware of this discrepancy and understand their rights and obligations regarding bankruptcy, especially if they are operating in Virginia.
It is important for potential Monicals Pizza franchisees to seek legal counsel to fully understand the implications of these clauses and how they apply in their specific state or jurisdiction. Understanding the interplay between the franchise agreement, federal law, and state addenda is crucial for making an informed decision about investing in a Monicals Pizza franchise.