Can Amorino terminate the franchise agreement if the franchisee declares voluntary bankruptcy?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
| ation by | Not | Not applicable. |
|---|---|---|
| franchisor | applicable. | |
| without cause | ||
| Termina | Section 16 of | We can terminate the franchise agreement if you commit any |
| f. | ||
| tion by | the franchise | one of a list of violations set forth in the franchise agreement, or |
| franchisor with | agreement | if you default under any other agreement between you and |
| cause | either us or any of our affiliates. If you are in breach of any agreement with us or any of our affiliates, we have the right to suspend any obligations by us or our affiliates, including providing products or services, until the breach is cured. Some violations are capable of being cured and some cannot be cured. We can also terminate if an approved transfer is not completed within a certain period of time following your death or permanent incapacity. | |
| "Cause" | Section 16.B | We may terminate for any default, other than a default for the |
| g. | ||
| defined - | of the | reasons listed in Section 16.A, that is capable of being cured |
| curable defaults | franchise | and the default has not been cured within 20 days of notice of |
| agreement | default. | |
| "Cause" | Section 16.A | We may terminate by giving you notice of termination upon |
| h. | ||
| defined – | of the | certain event, without any opportunity to cure: Your failure to |
| non | ||
| curable defaults | franchise | make any payment due under the franchise agreement within |
| agreement | 30 days of its due date; insolvency; voluntary bankruptcy; involuntary bankruptcy not dismissed within 30 days; general assignment for creditors, receivership, dissolution of your business entity; if execution is levied your business or property; foreclosure, levy and sale of assets of franchised business; failure to acquire a site by the site selection date; failure to complete initial training by opening date; failure to open Store by opening date; abandonment of the franchised business; loss of necessary permits and approvals to operate the franchised business; loss of right to occupy the Store premises; conviction of a felony or certain other crimes; unapproved transfers; repeated defaults, even if cured; misrepresentations in franchise application; knowingly understating your sales; knowingly maintaining false books or records; failure to make any payment when due to Amorino or any of its affiliates or approved suppliers, offering for sale or selling unauthorized products or services; violation of confidentiality and non-competition covenants; purchase or sale of gelato, sorbet, gelato macarons, or restricted dry goods which you purchased or obtained from an unapproved supplier; within any rolling 12-month period, your failure to pass two or more quality assurance inspections and or your failure to participate in any advertising or marketing programs. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 55–67)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, Amorino can terminate the franchise agreement if the franchisee declares voluntary bankruptcy. Specifically, under Section 16.A of the franchise agreement, voluntary bankruptcy is listed as one of the events that allows Amorino to terminate the agreement without providing an opportunity for the franchisee to cure the default. This means that if a franchisee files for voluntary bankruptcy, Amorino has the right to immediately terminate the franchise agreement.
This provision is fairly standard in franchise agreements, as bankruptcy can significantly impact a franchisee's ability to operate the business and meet their financial obligations to Amorino. The FDD states that termination can occur without any opportunity to cure the situation. This means the franchisee cannot prevent termination by resolving the bankruptcy.
For a prospective Amorino franchisee, this highlights the importance of maintaining a strong financial position and carefully managing their business to avoid circumstances that could lead to bankruptcy. It is crucial to understand the conditions under which Amorino can terminate the agreement and the potential consequences of such termination. Franchisees should seek legal and financial advice to fully understand their obligations and risks under the franchise agreement.