What are the consequences for a Better Blend franchisee who violates the requirements of ethics and values, leading to a non-curable default?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise | Summary |
|---|---|---|
| or other agreement | ||
| d. Termination by | FA: § 14.1 | If we violate a material provision of the |
| franchisee | ||
| MUDA: § 4 | franchise agreement and fail to cure or to make | |
| substantial progress toward curing the violation | ||
| within 30 days after notice from you. | ||
| If you sign a MUDA, you may terminate it at | ||
| any time. | ||
| e. Termination by | ||
| franchisor without cause | ||
| f. Termination by | We may terminate your agreement for cause, | |
| franchisor with cause | ||
| subject to any applicable notice and cure | ||
| opportunity. | ||
| If you sign a Multi-Unit Development | ||
| Agreement, termination of your MUDA does | ||
| not give us the right to terminate your franchise | ||
| agreement. However, if your franchise | ||
| agreement is terminated, we have the right to | ||
| terminate your MUDA. | ||
| g. “Cause” defined-- | Non-payment by you (10 days to cure); violate | |
| curable defaults | ||
| franchise agreement other than non-curable | ||
| default (30 days to cure). | ||
| h. “Cause” defined--non- | FA: Misrepresentation when applying to be a | |
| curable defaults | ||
| franchisee; knowingly submitting false | ||
| information; bankruptcy; fail to open by | ||
| specified deadline; lose possession of your | ||
| location; violation of law; violation of | ||
| confidentiality; violation of non-compete; | ||
| violation of ethics and values; violation of | ||
| transfer restrictions; slander or libel of us; | ||
| refusal to cooperate with our business | ||
| inspection; cease operations; operate in a | ||
| manner dangerous to health or safety (if not | ||
| corrected within 48 hours); score below 90/A | ||
| on government health inspections more than | ||
| twice in 36 months; score below passing grade | ||
| on brand inspection more than twice in 36 | ||
| months; three defaults in 12 months; cross- | ||
| termination; | ||
| a felony, or commission or accusation of an act | ||
| that is reasonably likely to materially and | ||
| unfav |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 34–38)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, violating the requirements of ethics and values is considered a non-curable default under the franchise agreement. This means that if a franchisee breaches the ethical standards set by Better Blend, the franchisor has grounds to terminate the franchise agreement without providing an opportunity to correct the violation.
Other actions that Better Blend considers a non-curable default include misrepresentation when applying to be a franchisee, knowingly submitting false information, bankruptcy, failing to open by the specified deadline, losing possession of the location, violating laws, violating confidentiality or non-compete agreements, slandering or libeling Better Blend, refusing to cooperate with business inspections, ceasing operations, or operating in a manner dangerous to health or safety if not corrected within 48 hours. Additionally, receiving low scores on government health inspections or brand inspections, accumulating multiple defaults within a short period, committing a felony, or any act that could negatively affect the brand can also result in termination.
For a prospective Better Blend franchisee, this underscores the importance of understanding and adhering to the franchisor's ethical standards and operational requirements from the outset. Failure to do so can lead to immediate termination of the franchise agreement and loss of the investment. Franchisees should ensure they fully comprehend the terms of the franchise agreement and seek clarification on any ambiguous points to avoid unintentional breaches that could result in termination.