Under what circumstances will a Bee Organized franchisee be in default of the Franchise Agreement?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchisee discloses, divulges, provides access to, communicates, and/or permits the communication of the contents, data and/or information contained in the Operations Manual to any third party not otherwise authorized by Franchisor;
- (j) Franchisee discloses, divulges, provides access to, communicates, and/or permits the communication of Confidential Information to any third party not otherwise authorized by Franchisor;
- (k) Franchisee engages in any activity that injures, harms, damages, or otherwise has a material
adverse effect on Franchisor, the System, the Licensed Marks, Bee Organized Businesses, the Franchised Business, and/or the reputation of the Bee Organized brand;
- (l) Franchisee, an Owner, and/or a Spouse, as applicable and whether individually or jointly, breaches or is in default of an Ancillary Agreement, and, if the applicable agreement provides for the opportunity to cure, fails to timely cure the breach or default of the Ancillary Agreement, including, without limitation, the Franchise Owner and Spouse Agreement and Guaranty;
- (m) Franchisee and/or an Owner of Franchisee is convicted of a felony crime, and/or pleads guilty or nolo contendere to a felony crime;
- (n) Franchisee and/or an Owner of Franchisee engages in intentionally dishonest and/or unethical conduct that, in Franchisor's Reasonable Business Judgment, results in embarrassment to Franchisor, the System, the Licensed Marks, Bee Organized Businesses, the Franchised Business, and/or the reputation of the Bee Organized brand;
- (o) Franchisee fails to complete, to Franchisor's reasonable satisfaction, the Training Program and/or supplemental training programs designated by Franchisor;
- (p) Franchisee fails, upon receiving actual or constructive notice, to: (1) immediately notify Franchisor of any known breach of the Confidentiality Agreement by any person or entity; (2) immediately notify Franchisor of facts and information that would cause a reasonable person to believe that a person or entity violated the Confidentiality Agreement and/or is in the process of violating the Confidentiality Agreement; and (3) take reasonable steps including ,notice to Franchisor and Franchisee's consultation with Franchisee's legal counsel, to prevent any person or entity from violating the terms of the Confidentiality Agreement and/or otherwise publicly disseminating Confidential Information;
- (q) Franchisee misappropriates, misuses, or makes any unauthorized use of the Licensed Marks, the Confidential Information, and/or the System and/or Franchisee materially impairs the goodwill associated with the Licensed Marks, and/or Franchisee applies for registration of the Licensed Marks anywhere in the world; and/or
- (r) Franchisee and/or an Owner fails to comply with Anti-Terrorism Laws or becomes listed on the Annex to Executive Order 13244.
- (3) Defaults and Automatic Termination After 10 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 10 calendar days of Franchisor's written notice:
- (a) Franchisee fails, refuses, and/or is unable to timely pay and/or satisfy the Royalty Fee, Advertising Contribution, and/or any other payment, fee, financial obligation, charge, and/or monetary obligation payable and/or due to Franchisor pursuant to the terms of this Agreement, under this Agreement, and/or any other agreement between Franchisor and Franchisee;
- (b) Franchisee and/or Franchisee's affiliate fails, refuses, and/or is unable to pay and/or satisfy any payment, fee, financial obligation, charge, and/or monetary obligation payable to Franchisor and/or Franchisor's affiliates pursuant to this Agreement and/or any other agreement between or among Franchisor, Franchisor's affiliate, Franchisee and/or Franchisee's affiliate; and/or
(c) Franchisee fails or refuses, at any time, and, without legal justification as may be determined by Franchisor in Franchisor's Reasonable Business Judgment, to pay any third party supplier or vendor for any goods, products, supplies, equipment, materials and/or any other items used by, benefitting, and/or intended to benefit the Franchised Business.
The foregoing events of default set forth in this Article 16.A.(3) 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.(3) 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.(3) with Article 16.A.(2), Article 16.A.(2) shall take precedence and govern.
Source: Item 23 — RECEIPTS (FDD pages 54–218)
What This Means (2025 FDD)
According to the 2025 Bee Organized Franchise Disclosure Document, a franchisee can be in default of their Franchise Agreement under various circumstances, which can lead to termination of the agreement. These circumstances include both defaults that trigger automatic termination and those that require written notice from Bee Organized.
Automatic termination, without notice or opportunity to cure, occurs if the franchisee becomes insolvent, makes an assignment for the benefit of creditors, admits inability to pay debts, or files for bankruptcy. Additionally, Bee Organized can terminate the agreement with written notice but without a cure period if the franchisee repeatedly defaults under specific articles of the agreement, intentionally refuses to comply with the agreement to harm Bee Organized, or operates the franchise in violation of laws that threaten public health and safety.
Further, a franchisee may be in default if they engage in activities that harm Bee Organized's brand or reputation, breach an ancillary agreement (such as the Franchise Owner and Spouse Agreement), are convicted of a felony, or engage in intentionally dishonest conduct that embarrasses Bee Organized. Failure to complete required training programs or to notify Bee Organized of confidentiality breaches can also result in default. These terms are typical in franchise agreements, as franchisors need to protect their brand and system standards. Franchisees should carefully review all default provisions to understand their obligations and the potential consequences of non-compliance.