What happens upon Advanced Mobile Iv And Amiv exercising its step-in rights?
Advanced_Mobile_Iv_And_Amiv Franchise · 2023 FDDAnswer from 2023 FDD Document
ination or expiration of this Agreement for any reason, any and all of our obligations to you under this Agreement will immediately cease and terminate and any and all of your rights under this Agreement will also immediately cease and terminate.
- 6.6 We May Assign Territory Upon Termination. Upon expiration or termination of this Agreement, we may immediately license or franchise the Franchise Territory to another person or may operate Advanced Mobile IV businesses within the Franchise Territory.
- 6.7 Our Step-In Rights. The parties want to prevent any operation or interruption of the Franchise that would cause harm to the Franchise and to our franchise system and lessen their value. Therefore, you authorize us to step in to operate the Franchise for as long as we believe necessary and practical in our exclusive judgment ("Step-In Rights"). We may do so without waiving any other rights or remedies that we may have. Cause for stepping-in may include our reasonable determination that: you are incapable of operating the Franchise; you are absent or incapacitated because of illness or death; you have failed to pay when due any equipment lease payments, suppliers, or inventory payments; you have failed to pay to us when due any franchise, royalty, advertising, or other fee; you have failed to pay when due any taxes or assessments against the Franchise or property used in the Franchise; you have failed to pay when due any liens or encumbrances placed upon or against your business property; your business activities are having a negative impact upon the value of our franchise system or we decide that significant operational problems require us to operate the Franchise for a time. 30 days after exercising our step-in rights, we will re-evaluate your thencurrent status. At our discretion, we will either operate the Franchise for an additional 30-day period or turn the Franchise back over to you. In turning the Franchise back over to you, we do not waive our rights to step back in the future.
All Gross Sales from our operation of the Franchise will be for your exclusive account. We will pay from that Gross Sales all expenses, debts and liabilities we incur during our operation of the Franchise. This will include our personnel and administrative and travel costs, plus 15% to cover our overhead expenses. In addition, we will have the option, but not the obligation, to pay on your behalf any claims owed by you to any creditor or employee of the Franchise. You will reimburse us upon demand, including at the rate set forth above for overdue amounts.
We will keep in a separate account all Gross Sales generated by the operation of the Franchise, less the expenses of operation.
We will have no obligation to retain any employee of the Franchise, or to honor any contractual employment commitments you previously made. If we elect to retain any employee, employment will be pursuant to a new employment relationship or agreement between us and the employee. Employment will commence on the first business day on which we carry on business through the Franchise. Any claim by an employee for unpaid salary, vacation pay, or other benefits remains your responsibility.
Upon our exercise of these Step-In Rights, you agree to hold us harmless for all of your acts, omissions, damages, or liabilities arising during our operation of the Franchise.
33 – ADVANCED MOBILE IV FRANCHISE AGREEMENT
Our operation of the Franchise will not operate as an assignment to us of any lease or sublease of franchise property.
Source: Item 23 — RECEIPTS (FDD pages 54–202)
What This Means (2023 FDD)
According to the 2023 Advanced Mobile Iv And Amiv Franchise Disclosure Document, Advanced Mobile Iv And Amiv has the right to step in to operate a franchise if they believe it is necessary to prevent harm to the franchise or the franchise system. This is referred to as "Step-In Rights." Reasons for Advanced Mobile Iv And Amiv to exercise these rights include the franchisee's inability to operate the franchise, absence or incapacitation due to illness or death, failure to make payments (equipment leases, suppliers, inventory, franchise fees, royalties, advertising fees, taxes, or assessments), the presence of liens or encumbrances on the business property, or business activities negatively impacting the franchise system's value.
After exercising its step-in rights, Advanced Mobile Iv And Amiv will re-evaluate the franchisee's status after 30 days. At their discretion, they may either continue operating the franchise for another 30-day period or return the franchise to the franchisee. It's important to note that returning the franchise does not waive Advanced Mobile Iv And Amiv's right to step in again in the future.
Financially, all gross sales generated during Advanced Mobile Iv And Amiv's operation of the franchise will be for the franchisee's exclusive account. However, Advanced Mobile Iv And Amiv will deduct all expenses, debts, and liabilities incurred during their operation, including personnel, administrative, and travel costs, plus 15% to cover overhead expenses. Advanced Mobile Iv And Amiv has the option, but not the obligation, to pay any claims owed by the franchisee to creditors or employees, and the franchisee must reimburse them upon demand, including any overdue amounts. The franchisee is also responsible for Advanced Mobile Iv And Amiv's reasonable legal and accounting fees and costs incurred because of the exercise of these Step-In Rights.
Advanced Mobile Iv And Amiv is not obligated to retain any of the franchisee's employees or honor any prior contractual employment commitments. If they do retain employees, it will be under a new employment relationship or agreement. The franchisee remains responsible for any employee claims for unpaid salary, vacation pay, or other benefits. Additionally, the franchisee agrees to hold Advanced Mobile Iv And Amiv harmless for any acts, omissions, damages, or liabilities arising during their operation of the franchise. Advanced Mobile Iv And Amiv's operation of the franchise does not act as an assignment of any lease or sublease of franchise property, and they are only responsible for rent or other charges related to the period of their operation.