What happens if execution is levied against a Baya Bar Developer's business or property?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, if execution is levied against a Baya Bar Developer's business or property, the Developer will be considered in material default under the agreement. In this case, all rights granted to the Developer automatically terminate without notice.
This means that the Developer immediately loses all privileges and permissions associated with the development agreement. This includes the right to open new Baya Bar locations within the designated development area. The termination occurs automatically without Baya Bar needing to provide any prior warning or opportunity for the Developer to correct the situation.
This clause protects Baya Bar by ensuring that developers who face serious financial or legal issues that could jeopardize their ability to fulfill their obligations under the development agreement are promptly removed from the system. This helps maintain the brand's integrity and protects other franchisees from potential negative impacts.