What constitutes 'good cause' for Best Brains to terminate a franchise and repurchase the business?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
- (f) The franchisee, after curing any failure in accordance with Section 7.B.2 engages in the same noncompliance whether or not such noncompliance is corrected after notice;
- (g) The franchisee breaches the franchise agreement three or more times in a 12-month period, whether or not corrected after notice;
- (h) The franchised business or business premises of the franchise are seized, taken over, or foreclosed by a government official in the exercise of his or her duties, or seized, taken over, or foreclosed by a creditor, lienholder, or lessor, provided that a final judgment against the franchisee remains unsatisfied for 30 days (unless a supersedeas or other appeal bond has been filed); or a levy of execution has been made upon the license granted by the franchise agreement or upon any property used in the franchised business, and it is not discharged within five days of such levy;
- (i) The franchisee is convicted of a felony or any other criminal misconduct which is relevant to the operation of the franchise;
- (j) The franchisee fails to pay any franchise fees or other amounts due to the franchisor or its affiliate within five days after receiving written notice that such fees are overdue; or
- (k) The franchisor makes a reasonable determination that continued operation of the franchise by the franchisee will result in an imminent danger to public health or safety.
- 7.B.2 Termination by Us with Opportunity to Cure. We may terminate this Agreement, after sending you notice and a 60-day opportunity to cure, for any other breach of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, there are several conditions that constitute 'good cause' for Best Brains to terminate a franchise agreement. These include instances where the franchisee engages in the same noncompliance after initially curing it, or breaches the franchise agreement three or more times within a 12-month period, regardless of whether the breaches are corrected after notice. These stipulations highlight the importance of consistent compliance with the franchise agreement to maintain the franchise.
Further reasons for termination with good cause involve external factors impacting the business. If the franchised business or its premises are seized or foreclosed by a government official, creditor, lienholder, or lessor, and a final judgment against the franchisee remains unsatisfied for 30 days (unless an appeal bond is filed), Best Brains has grounds for termination. Similarly, a levy of execution on the franchise license or any property used in the business that is not discharged within five days also constitutes good cause. These clauses protect Best Brains from potential liabilities and operational disruptions caused by the franchisee's financial or legal troubles.
Additionally, certain actions or inactions directly related to the franchisee's conduct can lead to termination. If a franchisee is convicted of a felony or any other criminal misconduct relevant to the franchise's operation, Best Brains can terminate the agreement. Failure to pay franchise fees or other amounts due to Best Brains or its affiliates within five days after receiving written notice of overdue payments is also considered good cause. Finally, if Best Brains reasonably determines that the continued operation of the franchise by the franchisee will result in an imminent danger to public health or safety, the agreement can be terminated. These conditions emphasize the franchisee's responsibility to maintain ethical and safe business practices and meet financial obligations.
Best Brains also retains the right to terminate the agreement for any other breach, providing the franchisee with a 60-day opportunity to cure the breach after receiving notice. This clause provides Best Brains with a broad safeguard, allowing them to address any significant issues not explicitly covered in the other 'good cause' provisions, while also giving the franchisee a chance to rectify the situation. This balance ensures that both parties are held accountable to the terms of the agreement.