Must a Monicals Pizza franchisee stop operating the franchised restaurant if the Franchise Agreement is terminated or not renewed?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or Other Agreement | Summary |
|---|---|---|
| g. "Cause" defined curable defaults | Section 16.2 | If a default arises from your failure to comply with a mandatory specification in the Franchise Agreement or Manual, you can avoid termination of the Franchise Agreement if you cure the default within 30 days of receiving our notice of default. If a default arises from your failure to maintain insurance, you can avoid termination of the Franchise Agreement if you cure the default within 10 days of receiving our notice of your failure to maintain insurance. If a default arises from your failure to make payments due to us, you can avoid termination of the Franchise Agreement if you cure the default within 5 days of receiving our notice of default. If we terminate the Franchise Agreement following a default, your interest in the franchise will terminate. |
| h. "Cause" defined-non curable defaults | Section 16.2 and Exhibit 6 | We have the right to terminate the Franchise Agreement without giving you an opportunity to cure if you: fail to select an approved site for or establish, equip and begin operations of the franchised restaurant; fail to have your designated manager satisfactorily complete training; made a material misrepresentation or omission in the application for the franchise; are convicted of or plead no contest to a felony or other crime or offense likely to affect the reputation of either party or the franchised restaurant; after notices to cure, fail to refrain from activities, behavior or conduct likely to adversely affect the reputation of either party or the franchised restaurant; use the Confidential Operations Manual, trade secrets or other confidential information in an unauthorized manner; abandon the franchised restaurant for 5 or more consecutive days; surrender or transfer of control of the franchised restaurant in an unauthorized manner; fail to maintain the franchised restaurant under the supervision of a designated manager following the death or incapacity of one of your owners; submit reports on 2 or more separate occasions understating any amounts due by more than 3%; are adjudicated bankrupt, insolvent or make a general assignment for the benefit of creditors; misuse or make unauthorized use of the Marks; fail on 2 or more occasions within any 12 months to submit reports or records or to pay any fees due us or any affiliate; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 32–41)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, if the Franchise Agreement is terminated following a default by the franchisee, the franchisee's interest in the franchise will terminate. This means the franchisee must cease operating the Monicals Pizza restaurant.
Monicals Pizza can terminate the Franchise Agreement if the franchisee defaults. Certain defaults, such as failure to comply with mandatory specifications, maintain insurance, or make payments, can be cured within specified timeframes (30 days, 10 days, and 5 days respectively) after receiving notice. However, other defaults, such as failing to select an approved site, failing to have a manager complete training, making misrepresentations, committing certain crimes, or abandoning the restaurant, do not offer an opportunity to cure.
If a Monicals Pizza franchisee wants to renew their agreement, they may renew for 3 additional terms of 5 years each if they meet certain conditions. These conditions include substantially complying with the Franchise Agreement, making necessary capital expenditures to maintain uniformity, satisfying all monetary obligations, not being in default, providing timely written notice of intent to renew, signing the current Franchise Agreement (which may have different terms), complying with current qualifications and training, and signing a General Release.