What are the 'Step In Rights' of Benjamin Franklin Plumbing if a franchisee fails to cure a default?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
e franchisee's obligations under the franchise agreement for such other Franchised Business, including without limitation the payment of all Royalty Fees, advertising fees, and other obligations.
- 16.6. Pre-Termination Options of Franchisor. Prior to the termination of this Agreement, if you fail to pay any amounts owed to us or our affiliates or fail to comply with any term of this Agreement, then in addition to any right we may have to terminate this Agreement or to bring a claim for damages, we will have the right to take the actions set out below and continue them until you have cured the default to our satisfaction. The taking of any of the actions permitted in this Section 16.6 will not suspend or release you from any obligation that would otherwise be owed to us or our affiliates under the terms of this Agreement. We may:
- 16.6.1 Remove the listing of the Franchised Business from all advertising published or approved by us;
- 16.6.2 Prohibit you from attending any meetings or seminars held or sponsored by us or taking place on our premises;
- 16.6.3 Suspend access to the Call Center, the Franchisee Portal, and any technology systems we provide you access to, whether it is our technology or a third-party license; and/or
- 16.6.4 Suspend services provided to you by us or our affiliates under this Agreement, including but not limited to
Source: Item 23 — RECEIPTS (FDD pages 88–312)
What This Means (2025 FDD)
According to the 2025 FDD, Benjamin Franklin Plumbing has 'Step In Rights' that allow them to assume temporary management of a franchised business if the franchisee fails to correct a default within the given cure period. This means Benjamin Franklin Plumbing can use its own employees or contractors, which may include other franchisees, to manage the business until the default is resolved and the franchisee is in compliance with the franchise agreement. This right is in addition to Benjamin Franklin Plumbing's right to terminate the agreement and any other rights they may have.
If Benjamin Franklin Plumbing exercises these 'Step In Rights', they are permitted to enter the premises and take complete authority over the operation of the franchised business. The franchisee is then required to pay Benjamin Franklin Plumbing (or their designee) a fee of up to $500 per day. Additionally, the franchisee must reimburse Benjamin Franklin Plumbing (or their designee) for all costs and overhead incurred during the temporary operation. These costs can include the expenses for supervising and staffing the business, as well as travel and lodging for personnel.
Furthermore, the franchisee agrees to indemnify and hold Benjamin Franklin Plumbing (and its designees and employees) harmless from any fines, claims, suits, or proceedings that may arise from their operation of the franchised business during this period. This means the franchisee is responsible for protecting Benjamin Franklin Plumbing from any legal or financial liabilities resulting from their management of the business while addressing the default. This clause highlights the significant financial and legal responsibility a franchisee bears even when Benjamin Franklin Plumbing steps in to manage the business temporarily.