What constitutes 'good cause' for Better Blend to terminate a franchise agreement?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
(7) Permitting unilateral termination of the franchise if such termination is without good cause or in bad faith. Good cause within the meaning of this subsection (7) includes any material violation of the franchise agreement.
(ix) Franchisee refuses to cooperate with or permit any audit or inspection by BBF or its agents or contractors, or otherwise fails to comply with Section 10.5 or Section 11.2;
(x) the Business is operated in a manner which, in BBF's reasonable judgment, constitutes a significant danger to the health or safety of any person, and Franchisee fails to cure such danger within 48 hours after becoming aware of the danger (due to notice from BBF or otherwise);
(xi) Franchisee fails to meet the health inspection standards described in Section 7.3(e) two or more times in any 36-month period;
(xii) Franchisee fails to achieve a passing score on an inspection conducted by BBF two or more times in any 36-month period;
(xiii) Franchisee has received two or more notices of default (or a single notice of more than one default) and Franchisee commits another breach of this Agreement, all in the same 12-month period;
(xiv) BBF (or any affiliate) terminates any other agreement with Franchisee (or any affiliate) due to the breach of such other agreement by Franchisee (or its affiliate) (provided that termination of a Multi-Unit Development Agreement with Franchisee or its affiliate shall not give BBF the right to terminate this Agreement);
(xv) Franchisee or any Owner is charged with, pleads guilty or no-contest to, or is convicted of a felony; or
(xvi) Franchisee or any Owner is accused by any governmental authority or third party of any act, or if Franchisee or any Owner commits any act or series of acts, that in BBF's opinion is reasonably likely to materially and unfavorably affect the Better Blend brand.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to the 2024 Better Blend Franchise Disclosure Document, 'good cause' for termination includes any material violation of the franchise agreement.
Additionally, Better Blend can terminate the franchise agreement if the franchisee refuses to cooperate with audits or inspections, operates the business in a way that poses a significant danger to health or safety without rectifying it within 48 hours, fails to meet health inspection standards more than twice in a 36-month period, or fails to achieve a passing score on inspections by Better Blend more than twice in a 36-month period. Further reasons include receiving two or more notices of default within a 12-month period and then committing another breach, or if Better Blend terminates another agreement with the franchisee due to a breach of that agreement.
Moreover, Better Blend may terminate the agreement if the franchisee or any owner is charged with, pleads guilty or no-contest to, or is convicted of a felony. Finally, Better Blend can terminate the agreement if the franchisee or any owner is accused of any act that, in Better Blend's opinion, is reasonably likely to materially and unfavorably affect the Better Blend brand.
These stipulations are important for a prospective franchisee to consider, as they outline specific scenarios that could lead to the termination of their franchise agreement. Understanding these conditions can help franchisees operate their Better Blend business in compliance with the agreement and avoid potential termination.