Under what circumstances related to default notices can the Baya Bar franchise agreement be terminated?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
17.2.20 has been given at least two (2) notices of default in any consecutive twelve (12)–month period, whether or not the defaults have been corrected;
17.2.21 has insufficient funds to honor a check or electronic funds transfer two (2) or more times within any consecutive twelve (12)-month period;
17.2.22 defaults, or an affiliate of Franchisee defaults, under any other agreement, including any other franchise agreement, with Franchisor or any of its affiliates, suppliers or landlord and does not cure such default within the time period provided in such other agreement; or
17.3.1 fails to pay when due any amounts due to Franchisor under this Agreement or any related agreement and does not correct the failure within five (5) days after written notice; provided, however, Franchisor has no obligation to give written notice of a late payment more than two (2) times in any twelve (12)– month period, and the third such late payment in any twelve (12)–month period shall be a non-curable default under Sections 17.2.20 and/or 17.2.21;
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to the 2024 Baya Bar Franchise Disclosure Document, Baya Bar can terminate the franchise agreement if the franchisee meets certain default conditions. Specifically, Baya Bar may terminate the agreement if the franchisee has been given at least two notices of default within a consecutive 12-month period, regardless of whether the defaults were corrected.
Another cause for termination is if the franchisee has insufficient funds to honor a check or electronic funds transfer two or more times within any consecutive 12-month period. Additionally, if the franchisee or an affiliate defaults under any agreement with Baya Bar, its affiliates, suppliers, or landlord, and fails to cure the default within the specified time period in that agreement, Baya Bar can terminate the franchise agreement.
Furthermore, if a franchisee fails to pay amounts due to Baya Bar under the franchise agreement or any related agreement, Baya Bar will provide a five-day written notice to correct the failure. However, Baya Bar is only obligated to provide this written notice twice in any 12-month period. A third late payment within that 12-month period constitutes a non-curable default, leading to immediate termination.
These conditions highlight the importance of maintaining sufficient funds, adhering to all agreements, and ensuring timely payments to avoid potential termination of the Baya Bar franchise agreement. Franchisees should be diligent in managing their financial obligations and addressing any defaults promptly to maintain a good standing with the franchisor.