What constitutes a non-curable default that could lead to termination of the Amerispec Inspection Services franchise agreement?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise agreement | Summary |
|---|---|---|
| disclaimed. Any other promises may not be enforceable. Notwithstanding the foregoing, nothing in the franchise agreement or any related agreement is intended to disclaim the representations made in the Franchise Disclosure Document. | ||
| u. Dispute resolution | Paragraph | In certain circumstances arbitration is mandatory (subject to state |
| by arbitration or mediation | 21 | law). |
| v. Choice of forum | Paragraph 21 | Subject to applicable state laws, all claims must be arbitrated or litigated in the city in which our principal place of business is located (currently, Memphis, Tennessee). |
| w. Choice of Law | Paragraph 21 Section in | Subject to applicable state laws, Tennessee law applies. |
| Provision | franchise agreement | Summary |
| g. "Cause" defined – curable defaults | Paragraphs 19.3 and 19.4 | We may terminate the Franchise Agreement for any reason constituting good cause, after providing you with 30 days to cure the default, other than the defaults in Section 19.2. In addition, you have 10 days to cure any noncompliance with federal, state or local regulations applicable to your business, 5 days to cure any levy on your Franchise Agreement, and 5 days to cure any late payment and fees to us. |
| h. "Cause" defined – non-curable defaults | Paragraph 19.2 | Non-curable defaults include: failure to satisfactorily complete Initial Training; abandonment of the Franchised Business; conviction of a felony or other criminal misconduct; failure to cure a default that materially impairs the goodwill associated with our marks; bankruptcy or assignment of your assets for the benefit of creditors or admitting you cannot pay your debts as they come due; repeated default of the same provision of the Franchise Agreement; unauthorized assignment of the Franchise Agreement, the Franchised Business, or your entity; any material misrepresentation relating to the purchase of the Franchised Business; if you engage in conduct that reflects unfavorably on the reputation or operation of your business or ours; if we believe your operation will result in imminent danger to the public health or safety; if you fail to submit required financial statements to us; if you fail to meet certain levels of gross receipts or sales penetration levels in your Territory; if you, your owners, or your affiliates default under an agreement with us or our affiliates or an agreement related to the Franchised Business; if you fail to pay any amounts due to a vendor for errors and omissions insurance or financing thereof on your behalf, where we have guaranteed payment of the premium or financed amount; or if you receive four or more default notices during the term. |
Source: Item 17 — Renewal, Termination, Transfer and Dispute Resolution. (FDD pages 36–39)
What This Means (2025 FDD)
According to Amerispec Inspection Services's 2025 Franchise Disclosure Document, there are several non-curable defaults that could lead to the termination of the franchise agreement. These include failing to satisfactorily complete Initial Training, abandoning the Franchised Business, or being convicted of a felony or other criminal misconduct.
Other non-curable defaults include failing to cure a default that materially impairs the goodwill associated with Amerispec Inspection Services's marks, bankruptcy or assignment of assets for the benefit of creditors, admitting inability to pay debts, repeated default of the same provision of the Franchise Agreement, and unauthorized assignment of the Franchise Agreement, the Franchised Business, or the franchisee's entity.
Additionally, material misrepresentations relating to the purchase of the Franchised Business, engaging in conduct that reflects unfavorably on the reputation or operation of the franchisee's business or Amerispec Inspection Services, operating in a way that poses an imminent danger to public health or safety, failing to submit required financial statements, and failing to meet certain levels of gross receipts or sales penetration levels in the Territory are also considered non-curable defaults. Furthermore, defaulting under an agreement with Amerispec Inspection Services or its affiliates, failing to pay amounts due to a vendor for errors and omissions insurance, or receiving four or more default notices during the term can lead to termination without an opportunity to cure the default.