What constitutes operating a Better Blend franchise in a manner dangerous to health or safety, 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, operating the franchise in a manner dangerous to health or safety is considered a non-curable default, potentially leading to termination of the franchise agreement. However, the franchisee has 48 hours to correct the issue. Other actions that constitute 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, violating ethics and values, violating transfer restrictions, slandering or libeling Better Blend, refusing to cooperate with business inspections, ceasing operations, 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 in 12 months, cross-termination, committing a felony, or any act reasonably likely to negatively affect the Better Blend brand.
This means that Better Blend franchisees must maintain strict adherence to health and safety standards, as any lapse could lead to immediate termination if not rectified within 48 hours. The FDD also highlights the importance of compliance with various legal and ethical standards, as violations in these areas can also result in non-curable defaults.
Prospective franchisees should carefully review the franchise agreement to fully understand what specific actions or omissions could be classified as operating in a manner dangerous to health or safety. They should also ensure they have systems in place to consistently meet health and safety standards and to promptly address any issues that may arise. Maintaining high standards in all areas of operation is crucial to avoid potential defaults and maintain a successful franchise with Better Blend.