What is the definition of 'cause' for termination of a Better Homes And Gardens Real Estate franchise?
Better_Homes_And_Gardens_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
| f. Termination by us with cause | Section 16.2.2 of the Franchise Agreement | We can terminate if you commit a breach, including any one of several listed violations, or if certain events occur; see "g" below. | | | Section 7 of the Limited Purpose Addendum | We can terminate for non-compliance with the addendum or if the Franchise Agreement expires or is terminated. | | g. "Cause" defined defaults which can be cured | Sections 16.2.3 and 16.2.6 of the Franchise Agreement | Cause means any material breach by you of your obligations, including non-payment of fees. You have 30 days to cure financial breaches; failure to assign after your death or incompetency; subfranchising by you; failure to comply with all applicable laws; operating any other business within the franchise location using the Marks; failure to properly display and use the Marks; failure to begin operating the Franchise as required under the Franchise Agreement or any Addenda; creation of a security interest in the Franchise Agreement or assets of the Business without our prior written consent; or any other material breach of the Franchise Agreement. If you are notified that your office fails to meet our Minimum Office Design and Appearance Standards, you have 90 days to correct the deficiencies. If these deficiencies are not corrected timely, we have the right to terminate the Franchise Agreement. | | | THE FRANCHISE RELATIONSHIP | | | | |---------------------------------------------------------|----------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--| | Provision | Section in Agreement | Summary | | | | h. "Cause" defined defaults which cannot be cured | Section 16.2.4 of the Franchise Agreement | Suspension or revocation of your real estate broker's license; conduct that impairs the goodwill of the Marks or the System; insolvency or bankruptcy; any default for which you have received notice of termination during the prior 12 months; any material misrepresentation made to us; operation of a competing residential brokerage business in violation of the in term non-competition covenant; or abandonment of your Office (which includes failing to commence operation in accordance with the Franchise Agreement). | | |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 63–67)
What This Means (2025 FDD)
According to the 2025 Better Homes And Gardens Real Estate Franchise Disclosure Document, 'cause' for termination is defined within Section 16.2.3 and 16.2.6 of the Franchise Agreement. Cause includes any material breach of obligations by the franchisee, such as non-payment of fees.
For financial breaches, Better Homes And Gardens Real Estate provides a 30-day cure period. Other curable causes include failure to assign the franchise after death or incompetency, subfranchising, failure to comply with applicable laws, operating another business within the franchise location using Better Homes And Gardens Real Estate's marks, failure to properly display and use the marks, failure to begin operating the franchise as required, or creating a security interest in the Franchise Agreement or business assets without prior written consent. Franchisees have 90 days to correct deficiencies if their office fails to meet the Minimum Office Design and Appearance Standards.
Additionally, Section 16.2.4 outlines defaults that cannot be cured. These include suspension or revocation of a franchisee's real estate broker's license, conduct that impairs the goodwill of the Better Homes And Gardens Real Estate marks or system, insolvency or bankruptcy, any default for which the franchisee received a termination notice in the prior 12 months, material misrepresentations made to Better Homes And Gardens Real Estate, operating a competing residential brokerage business in violation of the non-competition covenant, or abandonment of the office, including failing to commence operation as per the Franchise Agreement.
Better Homes And Gardens Real Estate can also terminate the Limited Purpose Office Addendum for non-compliance with the addendum or if the Franchise Agreement expires or is terminated, as stated in Section 7 of the Limited Purpose Office Addendum.