How many non-monetary default notices will Baya Bar provide before it becomes a non-curable default?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.3.2 fails to perform any non-monetary obligation imposed by this Agreement (excepting those defaults of obligations set forth in Sections 17.1 and 17.2 for which there is no opportunity to cure) and such default shall continue for five (5) days after Franchisor has given written notice of such default, or if the default cannot be reasonably corrected within said five (5)-day period, then if it is not corrected within such additional time as may be reasonably required assuming Franchisee proceeds diligently to cure; provided, however, Franchisor has no obligation to give written notice of a non-monetary default more than two (2) times in any twelve (12)–month period, and the third such default, whether monetary or non-monetary, in any twelve (12) – month period shall be a non-curable default under Section 17.2.20.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, Baya Bar is only obligated to provide a franchisee with written notice of a non-monetary default up to two times within a 12-month period. The third default, whether monetary or non-monetary, within that same 12-month window, will be considered a non-curable default.
This means that after the second written notice for a non-monetary default, a Baya Bar franchisee must be especially vigilant in correcting any further issues immediately to avoid a non-curable default. The franchisee will not receive another warning before the default becomes non-curable.
This policy aims to encourage franchisees to maintain standards and comply with the franchise agreement. However, it also places a significant responsibility on the franchisee to track and rectify any operational shortcomings promptly after receiving two notices to avoid further issues and potential termination of the agreement.