How can the All States M.E.D. agreement be altered or amended?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
As to franchises governed by the California Franchise Investment Law, if any of the terms of the Disclosure Document are inconsistent with the terms below, the terms below control.
THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE FRANCHISE DISCLOSURE DOCUMENT.
Item 3 of the Disclosure Document is amended by adding the following paragraph:
Neither we nor any person or franchise broker in Item 2 of this disclosure document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling these persons from membership in this association or exchange.
Item 17 of the Disclosure Document is amended by adding the following paragraphs:
California Business and Professions Code Sections 20000 through 20043 provide rights to the franchisee concerning termination, transfer, or non-renewal of a franchise. If the franchise agreement contains a provision that is inconsistent with the law, the law will control.
Item 17.g. of the Disclosure Document is modified to state that, in addition to the grounds for immediate termination specified in Item 17.h., the franchisor can terminate upon written notice and a 60 day opportunity to cure for a breach of the Franchise Agreement.
Item 17.h. of the Disclosure Document is modified to state that the franchisor can terminate immediately for insolvency, abandonment, mutual agreement to terminate, material misrepresentation, legal violation persisting 10 days after notice, repeated breaches, judgment, criminal conviction, monies owed to the franchisor more than 5 days past due, and imminent danger to public health or safety.
The franchise agreement requires binding arbitration. Arbitration will occur in Miami Lakes, Florida. This provision may not be enforceable under California law.
The franchise agreement contains a covenant not to compete which extends beyond the termination of the franchise. This provision may not be enforceable under California law.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
Based on the 2024 All States M.E.D. Franchise Disclosure Document, specific procedures for altering or amending the franchise agreement are not explicitly detailed within the provided excerpts. However, the California Addendum provides some insight into how the agreement interacts with state laws, suggesting potential areas where modifications might be necessary or where state law would take precedence.
The California Addendum indicates that if any terms of the Disclosure Document are inconsistent with California Franchise Investment Law, the terms of the law will take precedence. Furthermore, California Business and Professions Code Sections 20000 through 20043 provide rights to the franchisee concerning termination, transfer, or non-renewal of a franchise, and if the franchise agreement contains a provision inconsistent with this law, the law will control. This suggests that amendments or alterations might occur as a result of legal requirements or to ensure compliance with specific state laws.
Additionally, the addendum modifies certain items of the Disclosure Document, such as Item 17 regarding termination conditions, to align with California law. These modifications demonstrate that the franchise agreement can be altered through addenda to comply with specific state regulations. The document also notes that certain provisions, such as those requiring binding arbitration in Miami Lakes, Florida, or those containing covenants not to compete extending beyond the termination of the franchise, may not be enforceable under California law, implying potential areas for amendment or negotiation.
Prospective franchisees should directly inquire with All States M.E.D. about the specific processes and conditions under which the franchise agreement can be altered or amended. Understanding these procedures is crucial for addressing potential conflicts with state laws and for negotiating terms that are mutually agreeable.