How many days does a Baya Bar franchisee have to cure non-payment defaults?
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 limited time to correct payment defaults. Specifically, a Baya Bar franchisee has only 5 days to cure non-payments. This short cure period underscores the importance of maintaining strong financial management and ensuring timely payments to avoid potential termination of the franchise agreement.
This 5-day cure period applies not only to non-payments but also to any other defaults, with the exception of non-curable defaults that are listed in the Multi-Unit Development Agreement. These non-curable defaults are detailed further in the agreement, so prospective franchisees should carefully review those sections to understand what constitutes a non-curable default.
It is important for potential Baya Bar franchisees to understand the implications of these terms. Failing to cure a default, especially non-payment, within the specified 5-day period can lead to serious consequences, including termination of the franchise agreement. This highlights the need for franchisees to have sufficient financial resources and a robust system for managing payments and other obligations to Baya Bar.