Does the Baya Bar Franchisor have the option to terminate the agreement if the Developer is in default?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
erated by the Developer's Baya Bar outlet(s) during Franchisor's operation thereof, plus any and all costs of travel, lodging, meals and other expenses reasonably incurred by Franchisor, pending transfer of the Developer's Baya Bar outlet(s) and remaining development schedule to the deceased or disabled individual's lawful heirs or successors.
7. DEFAULT AND TERMINATION.
7.1 Default and Automatic Termination. Developer shall be deemed to be in material default under this Agreement, and all rights granted herein shall automatically terminate without notice to Developer, if Developer shall become insolvent or makes a general assignment for the benefit of creditors; or if Developer files a voluntary petition under any section or chapter of federal bankruptcy law or under any similar law or statute of the United States or any state thereof, or admits in writing his or her inability to pay debts when due; or if Developer is adjudicated a bankrupt or insolvent in proceedings filed against Developer under any section or chapter of federal bankruptcy laws or under any similar law or statute of the United States or any state; or if a bill in equity or other proceeding for the appointment of a receiver of Developer or other custodian for Developer's business or assets is filed and consented to by Developer; or if a receiver or other custodian (permanent or temporary) of Developer's assets or property, or any part thereof, is appointed by any court of competent jurisdiction; or if proceedings for a composition with creditors under any state or federal law should be instituted by or against Developer; or if a final judgment remains unsatisfied or of record for thirty (30) days or longer (unless supersedeas bond is filed); or if Developer is dissolved; or if execution is levied against Developer's business or property; or if suit to foreclose any lien or mortgage against any of Developer's Baya Bar outlet premises or equipment is instituted against Developer and not dismissed within thirty (30) days.
- 7.2 Defaults With No Opportunity to Cure.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to the 2024 Baya Bar Franchise Disclosure Document, the Franchisor has the option to terminate the agreement if the Developer is in default under certain conditions. Specifically, the document outlines two categories of defaults: those with no opportunity to cure and those that are curable.
For defaults with no opportunity to cure, Baya Bar may terminate the agreement immediately upon notice if the Developer has misrepresented or omitted material facts in applying for development rights or falsifies any report required by the Franchisor.
For curable defaults, Baya Bar may terminate the agreement if the Developer fails to correct the default within the specified time frame. The FDD does not specify what constitutes a curable default, but states that the franchisor will provide notice to the developer if they fail to cure the default within the time period set forth in Section 7.3 of the agreement.
Additionally, the agreement will automatically terminate if the Developer becomes insolvent, makes an assignment for the benefit of creditors, files for bankruptcy, or meets other conditions related to financial instability or legal proceedings as detailed in section 7.1 of the FDD.