If a Monicals Pizza franchisee is convicted of a felony, can the franchisor terminate the agreement?

According to the 2025 Monicals Pizza Franchise Disclosure Document, Monicals Pizza has the right to terminate the franchise agreement without an opportunity for the franchisee to cure the issue if the franchisee "is convicted of or pleads no contest to a felony or other crime or offense that is likely to adversely affect the reputation of Franchisor, Franchisee or the Franchised Restaurant".

This means that if a Monicals Pizza franchisee is convicted of a felony, or pleads no contest to a felony, and that felony is likely to negatively impact the reputation of Monicals Pizza, the franchisee, or the restaurant, Monicals Pizza can terminate the franchise agreement. This is a fairly standard clause in franchise agreements, as franchisors need to protect their brand reputation.

It is important to note that the termination is not automatic upon a felony conviction. Monicals Pizza must determine that the crime is "likely to adversely affect the reputation" of the brand, the franchisee, or the restaurant. This determination is subjective and could be a point of contention between Monicals Pizza and the franchisee. The FDD does not define what constitutes a crime that is "likely to adversely affect the reputation".

Prospective franchisees should consider the implications of this clause and seek legal counsel to understand their rights and obligations under the franchise agreement. They should also inquire with Monicals Pizza about examples of situations that would trigger this termination clause to better understand the franchisor's interpretation and enforcement of this provision.