Can Baya Bar terminate the Franchise Agreement if the franchisee does not complete construction within the required time frame?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
| h. | "Cause" defined - non-curable | Sections 17.1 and | The Franchise Agreement will terminate |
|---|---|---|---|
| defaults | 17.2 | automatically, without notice for the | |
| following defaults: insolvency; bankruptcy; | |||
| written admission of inability to pay debts; | |||
| receivership; levy; composition with | |||
| creditors; unsatisfied final judgment for | |||
| more than 30 days; or foreclosure | |||
| proceeding that is not dismissed within 30 | |||
| days. | |||
| We may terminate the Franchise | |||
| Agreement upon notice to you if you: do | |||
| not acquire a site, do not complete | |||
| construction, obtain permits and/or open | |||
| the Franchised Business within required | |||
| time frames; falsify any report to us; cease | |||
| operations for 5 days or more, unless the | |||
| premises are damaged and you apply to | |||
| relocate; lose possession of the premises, | |||
| unless you are not at fault for loss and you | |||
| timely apply to relocate; fail to restore and | |||
| re-open the Franchised Business within | |||
| 120 days after a casualty, as may be | |||
| extended by us; fail to comply with | |||
| applicable laws; default under any lease | |||
| for the premises; understate Gross | |||
| Revenue two (2) or more times; fail to | |||
| comply with insurance and indemnification | |||
| requirements; attempt a transfer in | |||
| violation of the Franchise Agreement; fail, | |||
| or your legal representative fails to | |||
| transfer as required upon your death or | |||
| permanent disability; misrepresent or omit | |||
| a material fact in applying for the | |||
| Franchise; are convicted or plead no | |||
| contest to a felony or crime that could | |||
| damage the goodwill or reputation of our | |||
| trademarks or the System; receive an | |||
| adverse judgment in any proceeding | |||
| involving allegations of fraud, racketeering | |||
| or improper trade practices or similar claim | |||
| that could damage the goodwill or | |||
| reputation of our trademarks or the | |||
| System; conceal revenues or maintain | |||
| false books; create a threat or danger to | |||
| public health or safety; refuse an | |||
| inspection or audit by us; use our | |||
| trademarks, copyrighted material or | |||
| Confidential Information in an | |||
| unauthorized manner; make an | |||
| unauthorized disclosure of Confidential | |||
| Information; fail to comply with non | |||
| competition covenants; default in the | |||
| performance of your obligations three (3) | |||
| or more times during the term or receive | |||
| two (2) or more default notices in any 12- | |||
| month period; default under any other | |||
| agreement with us or our affiliate; have | |||
| insufficient funds to honor a check or EFT | |||
| two (2) or more times within any twelve | |||
| (12)-month period; or terminate the | |||
| Franchise Agreement without cause. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 43–52)
What This Means (2024 FDD)
According to the 2024 Baya Bar Franchise Disclosure Document, Baya Bar may terminate the Franchise Agreement if a franchisee does not complete construction within the required time frames. Specifically, Baya Bar may terminate the Franchise Agreement if the franchisee does not acquire a site, complete construction, obtain permits, and/or open the Franchised Business within the time frame that is required.
This provision in the Franchise Agreement is important for prospective franchisees to understand. Franchisees must ensure they can meet the construction timelines outlined in the agreement. Failure to do so could result in the termination of the agreement and the loss of their investment. Franchisees should carefully review the construction timeline and any potential challenges that could delay the process before signing the agreement.
It is also important to note that the Franchise Agreement may outline additional grounds for termination, both with and without cause. Franchisees should carefully review the entire agreement to understand their rights and obligations, as well as the circumstances under which Baya Bar can terminate the agreement. This includes understanding the conditions for curing defaults and any applicable notice periods.