Under what conditions can Beauty Bungalows exercise its remedies if a franchised business is closed?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
3.2. Damaged Operating Assets.
If the property, equipment, and/or vehicles ("Operating Assets") used in the operation of any Franchised Business in your Development Schedule are destroyed or damaged by any cause beyond your control such that they may no longer continue to be utilized for the operation of a particular Franchised Business, you must immediately give us notice of such destruction or damage ("Destruction Event"). You must diligently work to repair and replace the Operating Assets of your Franchised Business as soon as possible to resume operation of your Franchised Business. If a Franchised Business is closed due to a Destruction Event, the Franchised Business will continue to be deemed "in operation" for the purpose of this Agreement for up to 90 days after the Destruction Event occurs. If a Franchised Business (i) is closed in a manner other than those described in this Section 3.2 or as otherwise agreed by us in writing or (ii) fails to reopen within 90 days after a Destruction Event, then we may exercise our rights under Section 6.2 (Our Remedies). In the event the Operating Assets are completely destroyed or otherwise incapable of being repaired following a Destruction Event, we will not exercise the remedies set forth under Section 6.2 provided, that (a) within the 30 days after the Destruction Event you have made arrangements with us or our designated supplier to obtain new Operating Assets for use in your Franchised Business; and (b) you are open and operating your Franchised Business in the protected territory within ninety (90) days of the Destruction Event.
Source: Item 23 — RECEIPTS (FDD pages 48–177)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, Beauty Bungalows can exercise its remedies under Section 6.2 if a franchised business is closed under specific conditions. If the closure is due to damage or destruction of operating assets (property, equipment, vehicles) beyond the franchisee's control, the franchisee must notify Beauty Bungalows immediately. The franchise is considered "in operation" for 90 days following this event, allowing time for repairs or replacements.
However, Beauty Bungalows can exercise its rights under Section 6.2 if the franchised business closes for reasons other than damage to operating assets or without written agreement from Beauty Bungalows. Additionally, if the franchised business does not reopen within 90 days after the destruction event, Beauty Bungalows may also exercise its remedies.
Even if the operating assets are completely destroyed and cannot be repaired, Beauty Bungalows will not exercise its remedies if the franchisee arranges for new operating assets with Beauty Bungalows or its designated supplier within 30 days of the destruction event, and the franchised business reopens within 90 days of the destruction event. This clause provides a grace period and outlines specific steps a franchisee must take to avoid penalties following a disruptive event.