What constitutes a default under Section 16.3 of the Benjamin Franklin Plumbing franchise agreement?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.3. Termination Following Expiration of Cure Period.
Except as provided in Sections 16.1 and 16.2 and elsewhere in this Agreement, we can terminate this Agreement only by giving you written notice of termination stating the nature of the default, at least thirty (30) days before the effective date of termination.
If the default is not cured within the thirty (30) day period (or such longer period as applicable law may require) this Agreement will terminate without further notice to you, effective at the end of the cure period.
Any material failure to comply with the requirements imposed by this Agreement (as supplemented by the Brand Standards Manuals) will be a default under this Section 16.3.
Source: Item 23 — RECEIPTS (FDD pages 88–312)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, Section 16.3 outlines the conditions under which Benjamin Franklin Plumbing can terminate the franchise agreement following a cure period. Outside of the specific instances listed in Sections 16.1 and 16.2, Benjamin Franklin Plumbing can only terminate the agreement by providing written notice of termination that details the nature of the default at least 30 days before the termination date.
If the franchisee fails to correct the default within this 30-day period (or any longer period required by applicable law), the agreement will terminate automatically at the end of the cure period, without any further notice. The FDD specifies that any significant failure to adhere to the requirements outlined in the franchise agreement, including those detailed in the Brand Standards Manuals, will be considered a default under Section 16.3.
In simpler terms, this section means that if a Benjamin Franklin Plumbing franchisee violates the franchise agreement in a substantial way, they will be given a chance to fix the problem. However, if they don't fix it within the given timeframe, Benjamin Franklin Plumbing has the right to terminate the agreement. It is important for prospective franchisees to understand what constitutes a 'material failure' and to be aware of the Brand Standards Manuals, as these define the standards that franchisees must adhere to in order to avoid being in default of the agreement.