What constitutes misrepresentation when applying to be a Better Blend franchisee, 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 | ||
| unfavorably affect our brand; |
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, misrepresentation when applying to become a franchisee is considered a non-curable default under the franchise agreement. This means that if Better Blend determines that a prospective franchisee provided false or misleading information during the application process, Better Blend has grounds to terminate the franchise agreement without providing an opportunity to correct the misrepresentation.
Submitting false information knowingly is also listed as a cause for non-curable default. Other actions that constitute a non-curable default include bankruptcy, failing to open the franchise by the specified deadline, losing possession of the location, violating laws, violating confidentiality or non-compete agreements, violating ethics and values, violating transfer restrictions, 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, scoring below 90/A on government health inspections more than twice in 36 months, scoring below a passing grade on brand inspections more than twice in 36 months, incurring three defaults within 12 months, cross-termination, committing a felony, or any action likely to materially and unfavorably affect the Better Blend brand are also considered non-curable defaults. These stipulations highlight the importance of honesty and transparency during the application process and adherence to the franchise agreement and operational standards after the franchise is awarded.