What is the significance of Article 16.A.(4) in relation to the termination of a Bee Organized franchise agreement?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
The foregoing events of default set forth in this Article 16.A.(4) shall exclude events of default that are otherwise governed by and/or constitute events of default under Article 16.A.(1) or Article 16.A.(2). In the event of any inconsistency or conflict between the provisions of this Article 16.A.(4) with Article 16.A.(1), Article 16.A.(1) shall take precedence and govern. In the event of any inconsistency or conflict between the provisions of this Article 16.A.(4) with Article 16.A.(2), Article 16.A.(2) shall take precedence and govern.
(4) Defaults and Automatic Termination After 30 Day Cure Period Franchisee shall be in default of this Agreement and, this Agreement shall be terminated, upon the occurrence of any one or more of the following actions, inactions, omissions, events, and/or circumstances, unless, Franchisee timely cures, to the satisfaction of Franchisor, such default/action, inaction, omission, event, and/or circumstance within 30 calendar days of Franchisor's written notice:
(a) Franchisee fails or refuses to comply with and/or breaches any term, condition, provision, and/or requirement of this Agreement that is not otherwise a default under Articles 16.A.(1), 16.A.(2), or 16.A.(3) of this Agreement;
(b) Franchisee fails or refuses to comply with and/or breaches any term, condition, provision, and/or requirement of any agreement, other than this Agreement, between Franchisor and Franchisee, and/or an affiliate of Franchisor and Franchisee;
(c) Franchisee fails or refuses, in accordance with the terms of this Agreement, to obtain and secure a signed lease agreement or fee simple ownership interest in an approved location for Franchisee's non-residential Administrative Office;
(d) Franchisee fails or refuses to develop and open the Franchised Business on or before the Scheduled Opening Date, in compliance with the terms of this Agreement, as designated or specified in the Operations Manual, and/or in accordance with Franchisor's standards and specifications as communicated to Franchisee from time to time;
Source: Item 23 — RECEIPTS (FDD pages 54–218)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, Article 16.A.(4) outlines specific defaults that can lead to the termination of the franchise agreement if not cured within a 30-day period after written notice from Bee Organized. This section details circumstances where Bee Organized can terminate the agreement if the franchisee fails to meet certain obligations. These obligations include complying with the franchise agreement, other agreements with Bee Organized, securing a lease for an administrative office, and opening the franchised business by the scheduled date.
Specifically, Article 16.A.(4) lists several actions or inactions that constitute a default. These include failing to comply with the terms of the franchise agreement, breaching any agreement between the franchisee and Bee Organized (or their affiliates), failing to secure a lease for the administrative office, and failing to open the Bee Organized business by the scheduled opening date. If any of these defaults occur, Bee Organized will provide written notice, and the franchisee has 30 calendar days to correct the issue to Bee Organized's satisfaction. Failure to cure the default within this timeframe will result in the termination of the franchise agreement.
It is important to note that the defaults listed under Article 16.A.(4) exclude events already covered under Articles 16.A.(1) or 16.A.(2). In case of any conflict between the provisions of Article 16.A.(4) and Articles 16.A.(1) or 16.A.(2), the latter articles take precedence. This means that certain severe defaults, which may lead to immediate termination without a cure period as described in 16.A.(1) and 16.A.(2), are not subject to the 30-day cure period provided in Article 16.A.(4). This distinction is crucial for a prospective franchisee to understand, as some breaches can lead to quicker termination than others.