How many breaches of the Monicals Pizza franchise agreement can occur before it constitutes grounds for termination?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.1.3 Developer is convicted of or pleads no contest to a felony or other crime or offense that may adversely affect the goodwill associated with the Marks;
- 8.1.4 Developer makes any unauthorized use of the Marks or unauthorized use or disclosure of the Confidential Information;
- 8.1.5 Franchisor has delivered a notice of termination for a Franchise Agreement between Franchisor and Developer in accordance with its terms and conditions, or Developer has terminated a Franchise Agreement without cause;
- 8.1.6 Developer fails to meet or satisfy any timing requirement or deadline contained in the Development Schedule; or
- 8.1.7 Developer fails to comply with any other provision of the Development Agreement and does not correct within thirty (30) days after written notice from Franchisor.
8.2 Termination With Opportunity to Cure
If Developer fails to comply with any other provision of this Development Agreement, Franchisor may terminate this Development Agreement by delivering notice of termination to Developer stating the reason for termination, provided that Developer shall have the right to cure a breach within thirty (30) days after delivery of Franchisor's notice of termination.
9. RIGHTS AND DUTIES ON TERMINATION OR EXPIRATION
9.1 Loss of Development Rights
Upon termination of this Development Agreement, the Development Rights granted to Developer under this Development Agreement shall automatically terminate. Developer shall have no additional rights to establish or operate any Monical's Restaurant for which a Franchise Agreement has not been executed by Franchisor and Developer. No default under this Development Agreement shall constitute a default under any Franchise Agreement between the parties, except to the extent that any default under this Development Agreement constitutes a default under any Franchise Agreement in accordance with the terms of the Franchise Agreement. Notwithstanding the above, the terms and conditions of each Franchise Agreement must be complied with by the Developer thereunder and shall control in determining whether any default exists under such Franchise Agreement.
Upon termination of an of Developer's Franchise Agreements, Developer's further rights under this Development Agreement shall also be terminated.
9.2 Amounts Owed to Franchisor
Developer shall immediately pay to Franchisor upon termination or expiration of the Development Agreement any amounts owed by Developer to Franchisor that are then unpaid, plus any interest due.
9.3 Confidential Information
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
The 2025 FDD outlines specific conditions under which a Monicals Pizza franchise agreement can be terminated. For a Development Agreement, Monicals Pizza can terminate the agreement if the developer is convicted of a felony, makes unauthorized use of the brand's marks or confidential information, terminates a Franchise Agreement without cause, fails to meet deadlines in the Development Schedule, or fails to comply with any other provision of the Development Agreement without correcting it within 30 days of written notice. A single instance of any of these violations can trigger termination.
For breaches other than those listed above, Monicals Pizza typically provides an opportunity to cure the breach within thirty 30 days after receiving a termination notice. However, the FDD emphasizes that any Franchise Agreements executed for individual Monicals Pizza restaurants are independent of the Development Agreement. This means that the terms of each Franchise Agreement will ultimately dictate whether a default exists under that specific agreement.
Monicals Pizza also stipulates that a failure to exercise any power or insist on strict compliance by the developer does not constitute a waiver of its right to demand exact compliance with the terms of the Development Agreement. This means that Monicals Pizza's leniency on one occasion does not prevent them from enforcing the agreement strictly in the future. Additionally, any breach of restrictions related to confidential information or competition can result in immediate injunctive relief for Monicals Pizza, highlighting the importance of adhering to these specific terms.