What is the cure period for non-payments 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 5-day cure period for non-payments under the Multi-Unit Development Agreement. This means that if a franchisee fails to make a payment, they have five days to correct the non-payment from the date that Baya Bar notifies them of the deficiency.
This cure period also applies to other defaults, except for non-curable defaults that are listed in the Multi-Unit Development Agreement. It is important for prospective franchisees to carefully review the agreement to understand what constitutes a non-curable default, as these types of defaults cannot be remedied with a payment.
In the franchise industry, cure periods are a standard practice to allow franchisees a chance to rectify minor issues before the franchisor takes more drastic action like termination. The length of the cure period can vary, but 5 days is a relatively short period, so Baya Bar franchisees need to act quickly to resolve any payment issues.