In Virginia, if a ground for termination in the Bft Multi-Unit Agreement or Franchise Agreement does not constitute 'reasonable cause' under Virginia law, what is the consequence?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any grounds for default or termination stated in the Multi-Unit Agreement or Franchise Agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, a specific provision addresses franchise agreements in Virginia. If any of the reasons Bft lists in its Multi-Unit Agreement or Franchise Agreement for terminating the agreement are not considered "reasonable cause" under the Virginia Retail Franchising Act or other Virginia laws, then that specific termination provision may not be enforceable. This means Bft might not be able to terminate the agreement based on that particular reason.
For a prospective Bft franchisee in Virginia, this is an important protection. It means that Bft cannot terminate the franchise agreement without a legally sound reason that aligns with Virginia law. The franchisee should carefully review the termination clauses in the agreement and understand what constitutes "reasonable cause" under Virginia law.
This provision aims to protect franchisees from arbitrary or unfair terminations by ensuring that Bft adheres to the legal standards of reasonable cause as defined in Virginia. It is advisable for potential franchisees to seek legal counsel to fully understand their rights and obligations under Virginia law and the franchise agreement.