Under what conditions can Auntie Annes terminate the SRU Addendum for cause?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in the SRU | Summary |
|---|---|---|
| Addendum | ||
| a. Length of the SRU Addendum term | Not applicable | Length of term is dependent on Franchise Agreement term. |
| b. Renewal or extension of the term | Not applicable | |
| c. Requirements for franchisee to | Not applicable | |
| renew or extend | ||
| d. Termination by franchisee | 15 | You must give us 14 days' advance written notice. |
| e. Termination by us without cause | 15 | We may terminate the applicable addendum with 48 hours' prior written notice to you for any reason. |
| f. Termination by us with cause | 14 | We may terminate the applicable addendum for any breach of the addendum or the Franchise Agreement. |
| g. "Cause" defined- curable defaults | 13 and 14 | Any violation of the provisions of the Franchise Agreement constitutes a breach of the addenda. |
| h. "Cause" defined –non-curable | 14 | Any violation of the provisions of the Franchise Agreement |
| defaults | constitutes a breach of the addenda. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTIONS (FDD pages 86–91)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, Auntie Annes can terminate the Satellite Retail Unit (SRU) Addendum for cause if the franchisee breaches either the addendum itself or the Franchise Agreement. The FDD specifies that any violation of the Franchise Agreement's provisions constitutes a breach of the SRU Addendum, providing grounds for termination. This applies to both curable and non-curable defaults.
This means that if a franchisee fails to meet obligations outlined in the Franchise Agreement, such as maintaining brand standards, making required payments, or adhering to operational procedures, Auntie Annes has the right to terminate the SRU Addendum. The broad definition of 'cause' gives Auntie Annes significant power to enforce compliance with the Franchise Agreement through the threat of terminating the SRU Addendum.
For a prospective franchisee, this underscores the importance of fully understanding and adhering to all terms of the Franchise Agreement. Failure to comply with any aspect of the Franchise Agreement, whether related to the SRU or not, could result in the termination of the SRU Addendum and potentially impact the franchisee's ability to operate their Auntie Annes location. It is crucial to seek legal counsel to fully understand the implications of these termination clauses before entering into a franchise agreement with Auntie Annes.