What is the exception to the cessation of operation rule for Baya Bar if the premises are damaged by a casualty?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
s, obtain all licenses and permits before opening, or open the Franchised Business within the time and in the manner specified in Article 8.
- 17.2.2 falsifies any report required to be furnished Franchisor hereunder;
- 17.2.3 ceases to operate the Franchised Business for a period of five (5) days or more; provided, however, that this provision shall not apply if through no fault of Franchisee, the premises are damaged or destroyed by a casualty and Franchisee applies within thirty (30) days after such event, for Franchisor's approval to relocate or reconstruct the premises (which approval shall not be unreasonably withheld) and Franchisee diligently pursues such reconstruction or relocation.
- 17.2.4 loses for any cause whatsoever the right of possession of the real property on which the Franchised Business is located;
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to the 2024 Baya Bar Franchise Disclosure Document, a franchisee is typically considered in default if they cease operating the franchised business for five or more days. However, there is an exception to this rule if the premises are damaged or destroyed by a casualty (such as a fire, flood, or other disaster) through no fault of the franchisee.
To qualify for this exception, the Baya Bar franchisee must apply for the Franchisor's approval to either relocate or reconstruct the premises within 30 days of the casualty event. The franchisor's approval cannot be unreasonably withheld. Furthermore, the franchisee must diligently pursue the reconstruction or relocation efforts.
In addition, the franchisee has a reasonable period of time, not exceeding 120 days from the date the location was rendered inoperable, to restore the Baya Bar location to full operation. This 120-day period may be extended at Baya Bar's discretion. If these conditions are met, the franchisee will not be considered in default for ceasing operations due to the casualty.