Under what conditions related to default notices can Auntie Annes terminate the franchise agreement?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
this Agreement, provided that: (i) we, in our sole discretion, determine that the transferee under the Transfer is able to perform our obligations under this Agreement; and (ii) the transferee agrees, in writing, to perform our obligations under this Agreement. We are not required to obtain your consent for our Transfer. Following the effective date of the Transfer, you will look solely to the transferee, and not to us, for the performance of all obligations in this Agreement.
17. DEFAULT AND TERMINATION
- 17.1 Your Termination and Notice of Our Breach. You will have no right to terminate this Agreement. If we breach this Agreement, your sole remedy will be an arbitration proceeding under this Agreement.
- 17.2 Our Termination: No Opportunity to Cure. We have the right to terminate this Agreement without affording you any opportunity to cure the default, effective on our sending of notice of termination to you (or the earliest date permitted by applicable law) if:
- A. You or your Owners violate the Personal Covenants or other restrictive covenants, including the restrictions related to the use of Confidential Information or Trade Secrets, in Section 15 (Confidential Information; Restrictive Covenants).
- B. You copy or permit others to copy any portion of the Manuals, except for forms and similar items included in them for the express purpose of copying, or fail to take all necessary precautions to ensure that the Manuals are kept free from theft, unauthorized copying, unauthorized access, fire, or other acts that may jeopardize the confidentiality of its contents.
- C. You or any of your Owners, officers, or directors: (i) are convicted of or plead no contest to a felony or a crime involving fraud or moral turpitude or any other crime that we deem
likely to have an adverse effect on the good name, business, goodwill, image or reputation of the Franchised Business, the System, or the Marks, whether on a local, regional, or national scale (including any such convictions or pleas that occurred prior to the Effective Date that we learn of after the Effective Date); (ii) engage in fraudulent, deceptive, unethical, criminal, or other conduct that, in our determination, is likely to have an adverse effect on the good name, business, goodwill, image, or reputation of the Franchised Business, the System, or the Marks, whether on a local, regional, or national scale; (iii) make, or have made, any material misrepresentation to us related to the Franchised Business or this Agreement; or (iv) knowingly maintain false books or records or submit any false reports to us related to the Franchised Business.
- D. You abandon the Franchised Business or otherwise voluntarily suspend operation of the Franchised Business without our prior written consent for five or more consecutive business days on which you were required to operate.
- E.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Anne's 2024 Franchise Disclosure Document, Auntie Anne's has the right to terminate the franchise agreement without providing an opportunity to cure the default under specific circumstances. This termination is effective immediately upon sending notice to the franchisee, or on the earliest date permitted by applicable law.
These circumstances include violations of personal or restrictive covenants, such as those related to confidential information or trade secrets as outlined in Section 15 of the agreement. Additionally, Auntie Anne's can terminate the agreement if a franchisee copies or allows others to copy the manuals (excluding forms intended for copying) or fails to protect the manuals from theft, unauthorized access, or other acts that could compromise their confidentiality.
Auntie Anne's may also terminate the agreement if the franchisee, their owners, officers, or directors are convicted of or plead no contest to a felony or a crime involving fraud or moral turpitude, or engage in fraudulent, deceptive, unethical, or criminal conduct that could adversely affect the brand's reputation. Furthermore, Auntie Anne's can terminate the agreement if the franchisee makes material misrepresentations or knowingly maintains false books or records related to the franchised business. For franchisees operating a Concession Shop in a Host Facility, failure to comply with the Site Agreement or deterioration of the Host Facility's quality or reputation can also lead to termination without an opportunity to cure.