What actions are considered a breach of contract by a Bombs Away franchisee that would allow Bombs Away Franchising to terminate the agreement without a cure period?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
ches this Agreement in any manner not described in subsection (a) or (c), and Franchisee fails to cure such breach to Bombs Away Franchising's satisfaction within 30 days after Bombs Away Franchising gives notice to Franchisee of such breach, then Bombs Away Franchising may terminate this Agreement.
- (c) Without Cure Period. Bombs Away Franchising may terminate this Agreement by giving notice to Franchisee, without opportunity to cure, if any of the following occur:
- (i) Franchisee misrepresented or omitted material facts when applying to be a franchisee, or breaches any representation in this Agreement;
- (ii) Franchisee knowingly submits any false report or knowingly provides any other false information to Bombs Away Franchising;
- (iii) a receiver or trustee for the Business or all or substantially all of Franchisee's property is appointed by any court, or Franchisee makes a general assignment for the benefit of Franchisee's creditors, or Franchisee is unable to pay its debts as they become due, or a levy or execution is made against the Business, or an attachment or lien remains on the Business for 30 days unless the attachment or lien is being duly contested in good faith by Franchisee, or a petition in bankruptcy is filed by Franchisee, or such a petition is filed against or consented to by Franchisee and the petition is not dismissed within 45 days, or Franchisee is adjudicated as bankrupt;
- (iv) Franchisee fails to open for business by the date specified on the Summary Page;
- (v) Franchisee or any Owner commits a material violation of Section 7.2 (compliance with laws) or Section 13.1 (confidentiality), violates Section 13.2 (non-compete) or Article 15 (transfer), or commits any other violation of this Agreement which by its nature cannot be cured;
- (vi) Franchisee abandons or ceases operation of the Business for more than 15 consecutive days;
- (vii) Franchisee or any Owner slanders or libels Bombs Away Franchising or any of its employees, directors, or officers;
- (viii) Franchisee refuses to cooperate with or permit any audit or evaluation by Bombs Away Franchising or its agents or contractors, or otherwise fails to comply with Section 10.5 or Section 11.2.
- (ix) the Business is operated in a manner which, in Bombs Away Franchising'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 Bombs Away Franchising or otherwise);
- (x) Franchisee has received two or more notices of default and Franchisee commits another breach of this Agreement, all in the same 12-month period;
- (xi) Bombs Away Franchising (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);
- (xii) Franchisee or any Owner is charged with, pleads guilty or no-contest to, or is convicted of a felony; or
- (xiii) 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 Bombs Away Franchising's opinion is reasonably likely to materially and unfavorably affect the Bombs Away brand.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away Franchising can terminate the franchise agreement without allowing the franchisee an opportunity to correct the issue under certain conditions. These conditions include misrepresentation or omission of material facts during the application process, or breaching any representation made in the agreement.
Additionally, Bombs Away can terminate the agreement without a cure period if the franchisee knowingly submits false reports or provides false information to Bombs Away Franchising. Other actions that can lead to immediate termination include the appointment of a receiver or trustee for the business, the franchisee making a general assignment for the benefit of creditors, or being unable to pay debts as they become due. A levy or execution against the business, or an attachment or lien remaining on the business for 30 days (unless contested in good faith), can also trigger immediate termination. Filing for bankruptcy, either by or against the franchisee, can also lead to termination without a cure period.
Further reasons for immediate termination include failing to open the business by the date specified, committing a material violation of compliance with laws or confidentiality, violating non-compete agreements or transfer restrictions, abandoning the business for more than 15 consecutive days, or slandering or libeling Bombs Away or its employees. Refusing to cooperate with audits, operating the business in a way that endangers health or safety without rectifying it within 48 hours after awareness, receiving two or more default notices within a 12-month period and then committing another breach, termination of any other agreement with the franchisee due to a breach, being charged with or convicted of a felony, or any act that could negatively affect the Bombs Away brand can also result in termination without a cure period.