What is the cure period for defaults other than non-payment under the Baya Bar Multi-Unit Development Agreement?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Multi- Unit Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Art. 3 | As determined by you and us based on the number of Baya Baroutlets you are to develop. |
| b. | Renewal or extension of the Term | Not Applicable | Not Applicable |
| c. | Requirements for franchisee to renew or extend | Not Applicable | Not Applicable |
| d. | Termination by franchisee | Not Applicable | You may seek termination upon any grounds available by state law. |
| e. | Termination by franchisor without cause | Section 6.6 | The Multi-Unit Development Agreement will terminate automatically upon your death or permanent disability, unless prohibited by law and the Development Rights are transferred within 6 months to a replacement developer that we approve. |
| f. | Termination by franchisor with cause | Section 7.1 | We may terminate only if you default. The Multi-Unit Development Agreement describes defaults throughout. Please read it carefully. |
| g. | “Cause” defined – curable defaults | Section 7.3 | You have 5 days to cure non-payments and any other defaults (except for non- curable defaults listed in the Multi-Unit Development Agreement and described in h. immediately below). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 43–52)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, a franchisee has a limited time to correct defaults under the Multi-Unit Development Agreement. Specifically, the document states that a franchisee has 5 days to cure defaults other than non-payment. This means that if a franchisee violates any term of the agreement (other than failing to make required payments), Baya Bar will provide a 5-day window to correct the issue.
It is important to note that not all defaults are curable. The Baya Bar Franchise Disclosure Document specifies certain defaults that cannot be cured, leading to immediate termination of the agreement. These non-curable defaults are detailed in Sections 17.1 and 17.2 of the Franchise Agreement and include events such as insolvency, bankruptcy, or failing to meet specific development timelines.
This short cure period underscores the importance of a Baya Bar franchisee's understanding and adherence to the terms of the Multi-Unit Development Agreement. Failing to promptly address any curable default within the 5-day window could result in the termination of the agreement and loss of the franchise rights. Prospective franchisees should carefully review the agreement to understand their obligations and the potential consequences of non-compliance.