What must an All States M.E.D. franchisee do to avoid termination after receiving a notice of default?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
- 16.2.2 Except as otherwise provided in Section 16.2.1, Franchisor has the right to terminate this Agreement for the following breaches and defaults by giving notice of such termination stating the nature of the default; provided, however, that Franchisee may avoid termination by curing such default or failure (or by providing proof acceptable to Franchisor that Franchisee has made all reasonable efforts to cure such default or failure and shall continue to make all reasonable efforts to cure until a cure is effected if such default or failure cannot reasonably be cured before the effective date of the termination) within the specified period:
- (a) within five (5) days of receiving notice of Franchisee's failure to pay any amounts due to Franchisor;
- (b) within ten (10) days of receiving notice of Franchisee's failure to maintain insurance as specified in Section 15 of this Agreement; or
- (c) within thirty (30) days of receiving notice of any other default by Franchisee or upon Franchisee's failure to comply with any mandatory specification, standard, or operating procedure prescribed in the Operations Manual or otherwise prescribed in writing.
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, a franchisee generally has the opportunity to avoid termination for certain breaches or defaults, provided they take corrective action within a specified timeframe. The franchisee must either cure the default or provide proof acceptable to All States M.E.D. that they have made and will continue to make all reasonable efforts to cure the default, especially if a complete cure cannot be reasonably achieved before the termination date.
The specific period allowed to cure a default depends on the nature of the breach. If the default involves failure to pay any amounts due to All States M.E.D., the franchisee has five days from receiving notice to rectify the situation. For failure to maintain insurance as specified in the agreement, the franchisee has ten days from receiving notice. In the case of any other default or failure to comply with mandatory specifications, standards, or operating procedures, the franchisee has thirty days from receiving notice to correct the issue.
It is important to note that these cure periods and termination rights may be subject to applicable state laws, which could require longer notice periods or different termination procedures. All States M.E.D. retains the right to reinstate or extend the term of the agreement to comply with such laws, without waiving any of its rights under the agreement. Furthermore, if a franchisee is in breach of any obligation, All States M.E.D. has the right to suspend its performance of any obligations under the agreement after delivering a notice of termination.