If I fail to comply with mandatory specifications or operating procedures prescribed by Aw, can my franchise agreement be terminated without an opportunity to cure?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- (i) fail on three (3) or more separate occasions within any twelve (12) consecutive month period to submit when due financial statements, reports or other data, information or supporting records, to pay when due the royalty fees, marketing fund contributions, other payments due to us or to pay amounts due to other persons, or otherwise fail to comply with this Agreement, or with any mandatory specification, standard or operating procedures we prescribe from time to time, whether or not such failures to comply are corrected after notice of those failures to comply is delivered to you;
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, under certain circumstances, failure to comply with mandatory specifications or operating procedures can lead to termination of the franchise agreement without an opportunity to cure the default. Specifically, if a franchisee fails to comply with the franchise agreement or any mandatory specification, standard, or operating procedures on three or more separate occasions within a twelve-month period, Aw has the right to terminate the agreement without allowing an opportunity to correct the failures. This clause applies regardless of whether the failures were corrected after notice was initially given.
However, Aw also allows for an opportunity to cure under different circumstances. If a franchisee fails to comply with any provision of the agreement or any mandatory specification, standard, or operating procedure, they typically have thirty days after written notice to correct the failure. If the breach cannot be reasonably cured within this period, the franchisee is given a reasonable amount of time to complete the cure, provided they commence a bona fide program to cure the breach within the initial thirty-day period and continue to take necessary actions until the cure is completed. If the franchisee fails to continue these actions or does not complete the cure within a reasonable period, Aw can terminate the agreement after providing written notice that the breach remains uncured.
In summary, a single instance of non-compliance with mandatory specifications or operating procedures typically allows for a cure period. However, repeated instances of non-compliance within a relatively short timeframe can result in immediate termination of the Aw franchise agreement, highlighting the importance of consistent adherence to the franchisor's standards and procedures.