Where can an All States M.E.D. franchisee find further information about termination of the Franchise Agreement following a 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.
16.3 Reinstatement and Extension
If provisions of this Agreement provide for periods of notice less than those required by applicable law, or provide for termination, cancellation or non-renewal other than in accordance with applicable law, Franchisor may reinstate or extend the term of this Agreement for the purpose of complying with applicable law by submitting a written notice to Franchisee without waiving any of Franchisor's rights under this Agreement.
16.4 Right of Franchisor to Discontinue Services to Franchisee
If Franchisee is in breach of any obligation under this Agreement, and Franchisor delivers to Franchisee a notice of termination according to Section 16.2.2, Franchisor has the right to suspend its performance of any of its obligations under this Agreement.
16.5 Right of Franchisor to Operate Franchised Business
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 30–31)
What This Means (2024 FDD)
According to the 2024 All States M.E.D. Franchise Disclosure Document, Section 16.2.2 outlines the franchisor's right to terminate the agreement due to breaches and defaults by the franchisee. All States M.E.D. will provide a notice of termination that specifies the nature of the default. The franchisee can avoid termination by curing the default within a specified period. If the default cannot be reasonably cured before the termination date, the franchisee can provide proof acceptable to All States M.E.D. that they have made all reasonable efforts to cure the default and will continue to do so until it is cured.
The cure periods vary depending on the nature of the default. A franchisee has five days to cure a failure to pay any amounts due to All States M.E.D. They have ten days to cure a failure to maintain insurance as specified in Section 15 of the agreement. For any other default or failure to comply with mandatory specifications, standards, or operating procedures in the Operations Manual or otherwise prescribed in writing, the franchisee has thirty days to cure the default after receiving notice.
Section 16.3 addresses reinstatement and extension, stating that if the agreement's notice periods are less than those required by applicable law, or if termination, cancellation, or non-renewal terms do not align with applicable law, All States M.E.D. may reinstate or extend the agreement's term to comply with the law. This will be done by submitting a written notice to the franchisee without waiving any of All States M.E.D.'s rights under the agreement.
Sections 16.4 and 16.5 describe All States M.E.D.'s rights to discontinue services to the franchisee and to operate the franchised business, respectively, under certain conditions of breach or termination. These sections provide additional context regarding the franchisor's actions and options in the event of a franchisee's default or termination.