What is the exception to the termination provision in the Beauty Bungalows Franchise Agreement related to bankruptcy?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
d to pay a renewal fee equal to: 15% of our then-current initial franchise fee or $7,500, whichever is greater.
- Beauty Bungalows Franchising, LLC 3.07 Franchisor's Post-Term Option Regarding Lease. Upon expiration, non-renewal, or earlier termination of this Agreement for any reason except Franchisee's termination pursuant to Section 13.01, Franchisor or its designee will have the option for thirty (30) days following the date of expiration, non-
renewal, or termination to assume Franchisee's remaining lease obligations without accruing any liability regarding the lease prior to the effective date of any assignment.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
Based on the 2025 Beauty Bungalows Franchise Disclosure Document, the franchisor has the option to assume the franchisee's remaining lease obligations for 30 days after the termination, non-renewal, or expiration of the agreement. However, this is with the exception of the franchisee terminating the agreement as per section 13.01.
This means that if the franchisee terminates the agreement according to section 13.01, Beauty Bungalows does not have the option to assume the lease. This could be relevant in situations where the franchisee is experiencing financial difficulties, including bankruptcy, and wishes to terminate the agreement.
It is important for a prospective Beauty Bungalows franchisee to carefully review section 13.01 of the Franchise Agreement to understand the conditions under which they can terminate the agreement and the implications for the lease obligations.