What is the definition of 'affiliate' in the context of the cross-default provision in the Benjamin Franklin Plumbing franchise agreement?

According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, the term 'affiliate' is specifically defined within the context of the cross-default provision. This provision allows Benjamin Franklin Plumbing to treat a default by the franchisee or their affiliate under any other agreement with Benjamin Franklin Plumbing or its affiliates as a default under the current franchise agreement. This is subject to any applicable notice and cure provisions in the other agreement.

For a prospective Benjamin Franklin Plumbing franchisee, this definition is important because it broadens the scope of what constitutes a default. It means that if the franchisee or an entity controlled by, controlling, or under common control with them fails to meet obligations under any agreement with Benjamin Franklin Plumbing, it can trigger a default under the franchise agreement itself. This could include defaults related to supply agreements, financing arrangements, or other business dealings with Benjamin Franklin Plumbing or its related entities.

The cross-default provision creates a significant risk for franchisees because it ties together all their financial and contractual relationships with Benjamin Franklin Plumbing. A seemingly minor default in one area could have serious repercussions for their franchise. Franchisees should carefully review all agreements with Benjamin Franklin Plumbing and its affiliates to understand their obligations and the potential consequences of default.

It is common for franchise agreements to include cross-default provisions, but the specific definition of 'affiliate' and the scope of the provision can vary. Franchisees should seek legal counsel to fully understand the implications of this clause and how it might affect their business operations and financial stability.