factual

Where can I find information about franchisee rights upon termination and non-renewal in relation to All States M.E.D.?

All_States_M_E_D Franchise · 2024 FDD

Answer from 2024 FDD Document

The following is added to the end of the "Summary" sections of Item 17(c), titled "Requirements for franchisee to renew or extend," and Item 17(m), entitled "Conditions for franchisor approval of transfer":

However, to the extent required by applicable law, all rights you enjoy and any causes of action arising in your favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this proviso that the non-waiver provisions of General Business Law Sections 687.4 and 687.5 be satisfied.

  1. The following language replaces the "Summary" section of Item 17(d), titled "Termination by franchisee":

You may terminate the agreement on any grounds available by law.

  1. The following is added to the end of the "Summary" sections of Item 17(v), titled "Choice of forum," and Item 17(w), titled "Choice of law":

The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by Article 33 of the General Business Law of the State of New York.

16.2 Termination by Franchisor

  • 16.2.1 Franchisor has the right to terminate this Agreement, without any opportunity to cure by Franchisee, if Franchisee:
  • (a) fails to timely establish, equip, and commence operations of the Franchised Business according to Section 5;
    • (b) fails to satisfactorily complete any training program according to Section 8;
  • (c) fails to maintain all required professional licenses, permits, and certifications for a period exceeding five (5) business days;
  • (d) made any material misrepresentation or omission in its application for the Franchise or otherwise to Franchisor in the course of entering into this Agreement;
  • (e) is convicted of or pleads no contest to a felony or other crime or offense that is likely to adversely affect the reputation of Franchisor, Franchisee, or the Franchised Business;
  • (f) after notice to cure, fails to refrain from activities, behavior, or conduct likely to adversely affect the reputation of Franchisor, Franchisee, or the Franchised Business;
  • (g) discloses, duplicates, or otherwise uses in an unauthorized manner any portion of the Operations Manual, Trade Secrets, or any other Confidential Information;
  • (h) if required by Franchisor, fails to have any holder of a legal or beneficial interest in Franchisee, and any officer, director, executive, manager or member of the professional staff and all employees of Franchisee, execute a nondisclosure and non-competition agreement, in a form the same as or similar to the Nondisclosure and Non-Competition Agreement attached as Schedule 2, upon execution of this Agreement or prior to each such person's affiliation with Franchisee or fails to provide Franchisor with copies of all nondisclosure and non-competition agreements signed according to Section 7.4 if requested by Franchisor;
  • (i) abandons, fails, or refuses to actively operate the Franchised Business for five (5) or more consecutive days (unless the Franchised Business has not been operational for a purpose approved by Franchisor), or, if first approved by Franchisor, fails to promptly relocate the Franchised Business or any other event rendering the Premises unusable;

MINNESOTA ADDENDUM TO THE DISCLOSURE DOCUMENT

As to franchises governed by the Minnesota franchise laws, if any of the terms of the Disclosure Document are inconsistent with the terms below, the terms below control.

  • Minn. Stat. §80C.21 and Minn. Rule 2860.4400(J) prohibit the franchisor from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring the franchisee to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the Franchise Disclosure Document or agreements can abrogate or reduce (1) any of the franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or (2) franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
  • With respect to franchises governed by Minnesota law, the franchisor will comply with Minn. Stat. Sec. 80C.14 Subds. 3, 4, and 5 which require (except in certain specified cases), that a franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal of the franchise agreement and that consent to the transfer of the franchise will not be unreasonably withheld.
  • The franchisor will protect the franchisee's rights to use the trademarks, service marks, trade names, logotypes or other commercial symbols or indemnify the franchisee from any loss, costs or expenses arising out of any claim, suit or demand regarding the use of the name.
  • Minnesota considers it unfair to not protect the franchisee's right to use the trademarks. Refer to Minnesota Statutes 80C.12, Subd. 1(g).
  • Minnesota Rules 2860.4400(D) prohibits a franchisor from requiring

Source: Item 23 — RECEIPTS (FDD pages 44–174)

What This Means (2024 FDD)

According to the 2024 All States M.E.D. Franchise Disclosure Document, Item 17 outlines various aspects of the franchise agreement relating to termination, renewal, transfer, and dispute resolution. Specifically, it details the conditions under which a franchisee can terminate the agreement, stating that termination can occur on any grounds available by law. This suggests franchisees have rights and options for ending the agreement, subject to legal provisions.

Item 17 also addresses the rights of franchisees in New York, stipulating that the non-waiver provisions of General Business Law Sections 687.4 and 687.5 remain in effect. This means that certain rights and causes of action available to franchisees under New York law cannot be waived by the franchise agreement. The FDD also includes a Minnesota addendum that states Minnesota law includes certain protections related to termination and non-renewal, including specific notice periods that All States M.E.D. must adhere to.

Item 16.2.1 lists conditions under which All States M.E.D. can terminate the agreement without opportunity to cure, such as failing to maintain required licenses or misrepresenting information. These clauses highlight the importance of franchisees meeting their contractual obligations and adhering to legal and ethical standards. Prospective franchisees should carefully review Item 17, Item 16.2.1, and any state-specific addenda to fully understand their rights and obligations regarding termination and renewal, and should consult with a legal professional to ensure they understand the full scope of their rights under applicable laws.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.