Under what conditions does a Baya Bar Developer's agreement automatically terminate without notice?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
7.1 Default and Automatic Termination. Developer shall be deemed to be in material default under this Agreement, and all rights granted herein shall automatically terminate without notice to Developer, if Developer shall become insolvent or makes a general assignment for the benefit of creditors; or if Developer files a voluntary petition under any section or chapter of federal bankruptcy law or under any similar law or statute of the United States or any state thereof, or admits in writing his or her inability to pay debts when due; or if Developer is adjudicated a bankrupt or insolvent in proceedings filed against Developer under any section or chapter of federal bankruptcy laws or under any similar law or statute of the United States or any state; or if a bill in equity or other proceeding for the appointment of a receiver of Developer or other custodian for Developer's business or assets is filed and consented to by Developer; or if a receiver or other custodian (permanent or temporary) of Developer's assets or property, or any part thereof, is appointed by any court of competent jurisdiction; or if proceedings for a composition with creditors under any state or federal law should be instituted by or against Developer; or if a final judgment remains unsatisfied or of record for thirty (30) days or longer (unless supersedeas bond is filed); or if Developer is dissolved; or if execution is levied against Developer's business or property; or if suit to foreclose any lien or mortgage against any of Developer's Baya Bar outlet premises or equipment is instituted against Developer and not dismissed within thirty (30) days.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the Developer Agreement can automatically terminate without notice under specific circumstances related to the developer's financial stability and legal standing.
The agreement will automatically terminate if the developer becomes insolvent, makes an assignment for the benefit of creditors, or files for bankruptcy. This also includes admitting in writing the inability to pay debts when due, being adjudicated bankrupt or insolvent, consenting to the appointment of a receiver, or having a receiver appointed for their assets.
Further conditions leading to automatic termination include instituting proceedings for composition with creditors, having a final judgment remain unsatisfied for thirty days or longer (unless a supersedeas bond is filed), dissolution of the developer entity, execution levied against the developer's business or property, or the institution of a suit to foreclose any lien or mortgage against any of the developer’s Baya Bar outlet premises or equipment that is not dismissed within thirty days. These terms are designed to protect Baya Bar from potential financial or legal issues that could arise from a struggling or compromised developer.