What is a Monicals Pizza franchisee required to do with leased, loaned, or other third-party equipment upon termination or non-renewal?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | or Other Agreement | Summary |
|---|---|---|
| creating a health or safety hazard to customers, employees or the public; engage in any activity reserved to us; fail to comply with laws or regulations after notice of non-compliance; on 2 or more separate occasions, breach the Franchise Agreement or fail to comply with requirements, specifications, standards or procedures on 2 or more occasions within any 12 months; or default under any other agreement between you and us (or an affiliate) such that we (or the affiliate) have the right to terminate the agreement. | ||
| i. Franchisee's obligations on termination/non renewal | Section 17.1 | If the Franchise Agreement is terminated or not renewed, you must: stop operating the franchised restaurant; stop using any trade secret or other confidential information, the System and the Marks; if requested, assign your interest in the franchise location to us; cancel or assign to us any assumed names; promptly return to any third party any leased, loaned or other third-party equipment used in the operation of the franchised restaurant; pay all sums owed to us (or an affiliate) including damages and costs incurred in enforcing the Franchise Agreement; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 32–41)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, if the Franchise Agreement is terminated or not renewed, the franchisee is required to promptly return to any third party any leased, loaned, or other third-party equipment used in the operation of the franchised restaurant. This obligation is part of a larger set of requirements that Monicals Pizza franchisees must fulfill upon termination or non-renewal of their Franchise Agreement.
This provision ensures that Monicals Pizza franchisees do not retain or continue using equipment that belongs to third-party lessors or lenders after their franchise relationship ends. It protects the interests of these third parties and prevents potential legal issues related to unauthorized use of their equipment.
For a prospective Monicals Pizza franchisee, this means understanding all equipment lease or loan agreements and ensuring that procedures are in place to facilitate the prompt return of such equipment upon termination or non-renewal. Failure to comply with this requirement could result in legal action from the third-party equipment owner and potential liability for the franchisee.