Under what condition will the Development Rights granted to a developer under the Monicals Pizza Development Agreement automatically terminate?
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.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the Development Rights granted to a developer will automatically terminate under certain conditions. Specifically, the Development Rights automatically terminate upon the termination of the Development Agreement itself. This means the developer loses the right to establish and operate any Monicals Pizza restaurants for which a Franchise Agreement has not yet been executed.
Several events can trigger the termination of the Development Agreement. These include the developer being convicted of a felony, misusing Monicals Pizza's trademarks or confidential information, or the franchisor terminating a Franchise Agreement with the developer. Failing to meet deadlines in the Development Schedule or failing to comply with any provision of the Development Agreement can also lead to termination if the developer does not correct the issue within thirty days of written notice from Monicals Pizza.
It's important to note that a default under the Development Agreement does not automatically constitute a default under any existing Franchise Agreement, unless the Franchise Agreement specifically states otherwise. However, if any of the developer's Franchise Agreements are terminated, their rights under the Development Agreement will also be terminated. Upon termination or expiration of the Development Agreement, the developer must immediately pay any outstanding amounts owed to Monicals Pizza, including any accrued interest.