What happens if an All States M.E.D. franchisee fails to develop the franchised business within 300 days?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
Should Franchisee fail to develop the Franchised Business, in accordance with the other provisions of this Section 5 and within 300 days after this Effective Date, Franchisor has the right to terminate this Agreement and retain all fees paid to Franchisor by Franchisee.
Should Franchisee fail to commence operations of the Franchised Business within 300 days after the Effective Date, Franchisor has the right to terminate this Agreement. Franchisee must secure a location within 90 days. Franchisor shall have a period of 10 days to approve such location, and Franchisee must sign the lease within 15 days following our approval of such location. If this Agreement is terminated according to this Section 5.4, Franchisor shall retain the entire Franchise Fee paid by Franchisee. The Franchise Fee retained shall be specifically understood and agreed by the parties to be in consideration of the services provided, time expended, work performed, and other efforts of Franchisor up to the date of Franchisee's failure to timely commence operations of the Franchised Business and shall not be construed as nor considered to be a penalty.
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 develop the franchised business within 300 days after the effective date of the franchise agreement, All States M.E.D. has the right to terminate the agreement. In this case, All States M.E.D. will retain all fees paid by the franchisee.
Additionally, the FDD states that a franchisee must secure a location within 90 days, and All States M.E.D. has 10 days to approve the location. The franchisee then has 15 days to sign the lease after approval.
This means a prospective All States M.E.D. franchisee needs to be diligent in securing a location and commencing operations within the specified timeframes to avoid termination of the franchise agreement and loss of their initial investment. The franchisor emphasizes that time is of the essence in these matters.