Are there any defaults under the Baya Bar Multi-Unit Development Agreement that are not curable?

According to Baya Bar's 2024 Franchise Disclosure Document, certain defaults under the Multi-Unit Development Agreement are not curable. These non-curable defaults lead to automatic termination of the Franchise Agreement without notice. These include situations such as insolvency, bankruptcy, a written admission of inability to pay debts, receivership, levy, composition with creditors, an unsatisfied final judgment for more than 30 days, or a foreclosure proceeding that is not dismissed within 30 days.

Baya Bar may also terminate the Franchise Agreement with notice if the franchisee fails to acquire a site, complete construction, obtain permits, and/or open the Franchised Business within the required time frames. Other non-curable defaults include falsifying reports to Baya Bar, ceasing operations for 5 days or more (unless due to premises damage and application for relocation), losing possession of the premises (unless not at fault and timely applying to relocate), and failing to restore and re-open the Franchised Business within 120 days after a casualty (as may be extended by Baya Bar).

Additional non-curable defaults specified in the Baya Bar Franchise Agreement include failing to comply with applicable laws, defaulting under any lease for the premises, understating Gross Revenue two or more times, failing to comply with insurance and indemnification requirements, attempting an unauthorized transfer, or failing to transfer as required upon death or permanent disability. Further causes include misrepresentation or omission of a material fact in applying for the Franchise, conviction or pleading no contest to a felony or crime that could damage Baya Bar's goodwill or reputation, receiving an adverse judgment in proceedings involving fraud or similar claims, concealing revenues or maintaining false books, creating a threat to public health or safety, refusing inspections or audits, unauthorized use of trademarks or confidential information, failing to comply with non-competition covenants, defaulting in obligations three or more times during the term or receiving two or more default notices in any 12-month period, defaulting under any other agreement with Baya Bar or its affiliate, having insufficient funds to honor a check or EFT two or more times within any 12-month period, or terminating the Franchise Agreement without cause.

Prospective Baya Bar franchisees should carefully review Sections 17.1 and 17.2 of the Franchise Agreement, as referenced in the FDD, to fully understand the circumstances that could lead to a non-curable default and automatic termination of their franchise rights. Understanding these conditions is crucial for managing their business and avoiding actions that could jeopardize their investment.