Is the Franchise Agreement provision allowing termination upon bankruptcy for a Monicals Pizza franchise always enforceable?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
This Addendum to the Franchise Agreement is agreed to this day of, 20, between Monical Pizza Corporation and to amend and revise said Franchise Agreement as follows: seq.). 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:
FOR THE STATE OF WASHINGTON
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, the enforceability of the franchise agreement's termination clause upon the franchisee's bankruptcy is not absolute and may be subject to federal bankruptcy law. Specifically, an addendum to the franchise agreement for the Commonwealth of Virginia addresses this issue.
This addendum indicates that Section 16.2.1.11 of the Monicals Pizza Franchise Agreement, which allows for termination upon the franchisee's bankruptcy, might not be enforceable under federal bankruptcy law, specifically referencing 11 U.S.C. Section 101, et seq. This federal law could potentially override the franchise agreement's termination clause, offering some protection to franchisees who file for bankruptcy.
For a prospective Monicals Pizza franchisee, this means that while the franchise agreement contains a clause allowing termination upon bankruptcy, its actual enforcement can be complex and depend on the specifics of federal law. Franchisees in Virginia, or potentially other jurisdictions, should be aware that this clause may not be automatically enforced. It would be prudent for potential franchisees to seek legal counsel to fully understand their rights and obligations in the event of bankruptcy, and to discuss this specific clause with Monicals Pizza during their due diligence.