What happens if an All States M.E.D. franchisee cannot reasonably cure a default before the termination date?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
r the territory of any other Franchisor-controlled business.
- (v) fails to refer business opportunities or offers received by third parties, if such business opportunities or offers would take place in any geographic location which falls under the territory of other franchisees, Franchisor's associated businesses, or which are directly controlled by the Franchisor.
- 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
Following the delivery of a notice of termination according to Section 16.2.2, if necessary in Franchisor's discretion, Franchisor shall have the right, but not the obligation, to assume the operation of the Franchised Business until such time as Franchisee corrects the breach. Franchisor may charge a management fee as stated in the Operations Manual from time to time, currently equal to $250 per person per day, and Franchisor shall be entitled to reimbursement of any expenses Franchisor incurs that are not paid out of the operating cash flow of the Franchised Business.
17. RIGHTS AND DUTIES UPON EXPIRATION OR TERMINATION
17.1 Actions to be Taken
Except as otherwise provided herein, upon termination or expiration, this Agreement and all rights granted hereunder to Franchisee shall terminate and Franchisee shall:
(a) immediately cease to operate the Franchised Business and shall not thereafter, directly or indirectly, represent to the public or hold itself out as a present or former franchisee of Franchisor;
- (b) cease to use the Trade Secrets or other Confidential Information, the System and the Marks, including, without limitation, all slogans, symbols, logos, advertising materials, stationery, forms, and any other items which display or are associated with the Marks;
- (c) take such action as may be necessary to cancel or assign to Franchisor, at Franchisor's option, any assumed name or equivalent registration filed with state, city, or county authorities which contains the name "All States M.E.D." or any other Mark, and Franchisee shall furnish Franchisor with evidence satisfactory to Franchisor of compliance with this obligation within thirty (30) days after termination or expiration of this Agreement;
- (d) pay all sums owing to Franchisor and any Affiliate.
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, if a franchisee fails to cure a default, All States M.E.D. has the right to terminate the Franchise Agreement. However, the franchisee may avoid termination by providing proof acceptable to All States M.E.D. that they have made all reasonable efforts to cure the default. The franchisee must also show that they will continue to make all reasonable efforts to cure the default until a cure is effected if such default or failure cannot reasonably be cured before the effective date of the termination.
If All States M.E.D. delivers a notice of termination to a franchisee, All States M.E.D. has the right to suspend its performance of any of its obligations under the Franchise Agreement. Following termination, the franchisee must immediately cease operating the Franchised Business and cannot represent themselves as a current or former franchisee. They must also stop using any trade secrets, confidential information, the system, and the marks associated with All States M.E.D.
Additionally, the franchisee is obligated to cancel or assign any assumed name registrations containing "All States M.E.D." or any other mark to All States M.E.D., and provide evidence of compliance within thirty (30) days after termination or expiration of the agreement. The franchisee must also pay all sums owed to All States M.E.D. and any affiliate, including damages, costs, expenses, attorneys' fees, unpaid royalty fees, and loss of future royalty fee payments. The franchisee must return the Operations Manual, trade secrets, and all other confidential information to All States M.E.D. and assign all telephone listings and numbers for the Franchised Business to All States M.E.D.