Does the Amerispec Inspection Services agreement allow the Company to exercise its rights in good faith?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
However, the Company may take any legal action necessary to enforce its rights under this Agreement.
If the Franchisee shall in any way fail to maintain the standards of quality or service established by the Company in the operation of the Franchised Business, the Company shall have the right to assign such person or persons that it deems necessary to provide additional training to the Franchisee (above and beyond ordinary training and support provided to most franchisees) to assure that such standards of quality and service are maintained.
The Franchisee shall pay to the Company all of the Company's actual costs for such person so assigned, including wages, travel, and living expenses.
- 18.1 Company's Pre-Termination Rights. Prior to the termination of this Agreement, if the Franchisee fails to pay any amounts owed to the Company or its affiliates, or fails to comply with any term of this Agreement, then in addition to any right the Company may have to terminate this Agreement or to bring a claim for damages, the Company shall also have the option:
- 18.1.1 To cease providing AmeriSpec® Reports to the Franchisee;
- 18.1.2 To suspend all services provided to the Franchisee under this Agreement or otherwise, including but not limited to training, marketing assistance and the sale of marketing materials and other products and supplies;
- 18.1.3 Reduce and/or modify the size of Franchisee's Designated Territory or eliminate the "protected" status of the Designated Territory. If Franchisee fails to meet any of the requirements stated
in Paragraph 3.1.1 and Paragraph 3.1.2, Company may reduce and/or modify the size of Franchisee's Designated Territory or eliminate the "protected" status of the Designated Territory; and
- 18.1.4 To remove access to the System of Operation licensed by the Company.
- 18.2 Non-Waiver of Claims. The Company's actions as outlined in this Paragraph 18 may continue until the Franchisee has brought its accounts current, cured any default, and complied with the Company's requirements, and the Company has acknowledged the same in writing. The taking of any of the actions permitted in this Paragraph
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to Amerispec Inspection Services's 2025 Franchise Disclosure Document, the company can take legal action to enforce its rights under the franchise agreement. Additionally, if a franchisee fails to meet the company's standards of quality or service, Amerispec Inspection Services has the right to assign personnel to provide additional training to ensure these standards are maintained. The franchisee is responsible for covering the costs associated with this additional training, including wages, travel, and living expenses for the assigned personnel.
Amerispec Inspection Services also has pre-termination options if the franchisee fails to pay amounts owed or comply with any term of the agreement. These options include ceasing to provide AmeriSpec Reports, suspending services such as training and marketing assistance, modifying the franchisee's territory, or removing access to the System of Operation. These actions can continue until the franchisee addresses the issues and the company acknowledges the same in writing.
These stipulations mean that Amerispec Inspection Services retains considerable control over the operation and standards of its franchises. While this ensures consistency and quality across the brand, it also places a financial burden on franchisees who may struggle to meet these standards. Prospective franchisees should carefully consider these requirements and the potential costs associated with additional training or other corrective actions.
The FDD does not explicitly state that Amerispec Inspection Services will exercise its rights in 'good faith'. It outlines the conditions under which the company can take action, but it does not include language requiring them to act reasonably or with fair dealing. A prospective franchisee should seek clarification from Amerispec Inspection Services regarding their commitment to exercising their rights in a fair and reasonable manner.