What constitutes 'duly contesting in good faith' a lien on the Bombs Away Business?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (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;
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to the 2024 Bombs Away Franchise Disclosure Document, if an attachment or lien remains on the Bombs Away business for 30 days, Bombs Away Franchising may terminate the franchise agreement without an opportunity for the franchisee to cure the issue, unless the attachment or lien is being duly contested in good faith by the franchisee.
The FDD does not define what 'duly contesting in good faith' means in this context. This lack of definition leaves room for interpretation and potential disputes between Bombs Away and its franchisees.
A prospective Bombs Away franchisee should seek clarification from Bombs Away regarding the specific actions or legal processes that would be considered 'duly contesting in good faith.' Understanding Bombs Away's interpretation of this clause is crucial for assessing the risks associated with potential liens or attachments on the business.