What is the cure period for non-payment defaults 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 5 days to cure non-payments under the Multi-Unit Development Agreement. This also applies to curing any other defaults, except for non-curable defaults which are listed separately in the agreement.
This means that if a Baya Bar franchisee fails to make a payment, they have a short window to rectify the situation before Baya Bar can take further action, such as terminating the agreement. The franchisee should ensure they have systems in place to monitor payments and address any issues promptly to avoid default.
It is important to note that this cure period does not apply to non-curable defaults. These defaults, which can lead to immediate termination, are outlined in Section 17.1 and 17.2 of the Franchise Agreement and include events such as insolvency, bankruptcy, or failing to meet development timelines. Therefore, franchisees must understand both curable and non-curable default conditions to manage their obligations effectively.