Under what conditions will the Baya Bar Multi-Unit Development Agreement terminate automatically?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
cable | | d. | Termination by franchisee | Not Applicable | You may seek termination upon any grounds available by state law. | | e. | Termination by franchisor without cause | Section 6.6 | The Multi-Unit Development Agreement will terminate automatically upon your death or permanent disability, unless prohibited by law and the Development Rights are transferred within 6 months to a replacement developer that we approve. | | f. | Termination by franchisor with cause | Section 7.1 | We may terminate only if you default. The Multi-Unit Development Agreement describes defaults throughout. Please read it carefully. | | g. | “Cause” defined – curable defaults | Section 7.3 | You have 5 days to cure non-payments and any other defaults (except for non- curable defaults listed in the Multi-Unit Development Agreement and described in h. immediately below). |
| 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; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 43–52)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the Multi-Unit Development Agreement will terminate automatically upon the death or permanent disability of the franchisee. However, this is unless prohibited by law, and provided the Development Rights are transferred within 6 months to a replacement developer that Baya Bar approves.
Additionally, the Franchise Agreement will terminate automatically, without notice, if the franchisee experiences certain non-curable defaults. These include 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.
These termination conditions are typical in franchise agreements to protect the franchisor's brand and ensure business continuity. Prospective Baya Bar franchisees should carefully consider these conditions and consult with legal counsel to understand their rights and obligations under the Multi-Unit Development Agreement.