Under what condition does the obligation to continuously maintain the operation of a certain number of Monicals Pizza restaurants not apply, according to the Monicals Pizza FDD?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
12.1 Superiority of Franchise Agreement
For each Monical's Restaurant developed by Developer in the Development Territory, a separate Franchise Agreement shall be executed and any individual franchise fee as prescribed by Franchisor shall be paid to Franchisor. Developer acknowledges that any and all Franchise Agreements executed in connection with an individual Monical's Restaurant within the Development Territory are independent of this Development Agreement. The continued existence of any such Franchise Agreement shall not depend on the continuing existence of this Development Agreement. If any conflict shall arise in connection with this Development Agreement and any such Franchise Agreement, the latter shall have precedence and superiority over the former.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
Based on the 2025 Monicals Pizza Franchise Disclosure Document, Section 12.1 states that each Monicals Pizza restaurant developed by a developer in the development territory requires a separate Franchise Agreement and individual franchise fee. The developer acknowledges that these individual franchise agreements are independent of the Development Agreement.
This means that the continuation of any Franchise Agreement for a Monicals Pizza restaurant does not depend on the ongoing existence of the Development Agreement. If there is a conflict between the Development Agreement and any individual Franchise Agreement, the Franchise Agreement takes precedence.
In practical terms, this clause protects the franchisee. Should the Development Agreement terminate for any reason, the franchisee can continue to operate their Monicals Pizza restaurant under the terms of their separate Franchise Agreement, provided they remain in good standing and in compliance with that agreement. This provides a level of security and independence for each individual Monicals Pizza franchisee within a development territory.