What constitutes a non-curable default related to late payments for a Baya Bar franchise?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.3.1 fails to pay when due any amounts due to Franchisor under this Agreement or any related agreement and does not correct the failure within five (5) days after written notice; provided, however, Franchisor has no obligation to give written notice of a late payment more than two (2) times in any twelve (12)– month period, and the third such late payment in any twelve (12)–month period shall be a non-curable default under Sections 17.2.20 and/or 17.2.21;
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, a third late payment within a 12-month period constitutes a non-curable default. Specifically, Baya Bar is not obligated to provide written notice of a late payment more than two times within a 12-month period.
This means that if a Baya Bar franchisee is late on payments three times within a year, the franchise agreement can be terminated immediately without an opportunity to correct the situation. The first two late payments require a written notice and a five-day window to cure the default. However, the third late payment triggers an immediate, non-curable default.
This policy is stricter than some franchise agreements, which may allow for multiple cure periods before termination. Prospective Baya Bar franchisees should be aware of this strict payment policy and ensure they have sufficient financial stability to avoid repeated late payments. Careful management of finances and adherence to the payment schedule are crucial to maintaining the franchise agreement in good standing.