What actions can Bombs Away Franchising take regarding supplies if the franchisee is in default?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.4 Right to Discontinue Supplies Upon Default. While Franchisee is in default or breach of this Agreement, Bombs Away Franchising may (i) require that Franchisee pay cash on delivery for products or services supplied by Bombs Away Franchising, (ii) stop selling or providing any products and services to Franchisee, and/or (iii) request any third-party vendors to not sell or provide products or services to Franchisee.
No such action by Bombs Away Franchising shall be a breach or constructive termination of this Agreement, change in competitive circumstances or similarly characterized, and Franchisee shall not be relieved of any obligations under this
Agreement because of any such action. Such rights of Bombs Away Franchising are in addition to any other right or remedy available to Bombs Away Franchising.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, if a franchisee is in default or breach of the Franchise Agreement, Bombs Away Franchising has specific rights regarding the supply of products and services. Bombs Away may require the franchisee to pay cash on delivery for any products or services it supplies. Bombs Away Franchising can also stop selling or providing any products and services to the franchisee entirely. Additionally, Bombs Away Franchising can request that third-party vendors not sell or provide products or services to the franchisee.
These actions by Bombs Away Franchising will not be considered a breach or constructive termination of the agreement, nor will they change the competitive circumstances. The franchisee remains obligated under the agreement despite these actions. These rights are in addition to any other rights or remedies available to Bombs Away Franchising.
This clause protects Bombs Away Franchising by allowing them to limit their exposure to a franchisee who is not meeting their obligations. It also puts pressure on the franchisee to cure the default to ensure a continuous supply of necessary products and services for their Bombs Away business. Prospective franchisees should understand these conditions and ensure they have a plan to address potential defaults to avoid disruptions in their supply chain.