Does Bombs Away Franchising have an obligation to cure a franchisee's default?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.3 Bombs Away Franchising's Right to Cure. If Franchisee breaches or defaults under any provision of this Agreement, Bombs Away Franchising may (but has no obligation to) take any action to cure the default on behalf of Franchisee, without any liability to Franchisee.
Franchisee shall reimburse Bombs Away Franchising for its costs and expenses (including the allocation of any internal costs) for such action, plus 10% as an administrative fee.
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 has no obligation to cure a franchisee's default. However, Bombs Away Franchising has the option to take action to cure the default on behalf of the franchisee without incurring any liability.
If Bombs Away Franchising chooses to cure a default, the franchisee is responsible for reimbursing Bombs Away Franchising for all associated costs and expenses, including internal cost allocations, plus an additional 10% administrative fee. This means that while Bombs Away may step in to help a struggling franchisee, it is ultimately the franchisee's financial responsibility to cover the costs of the cure.
This clause protects Bombs Away Franchising from being obligated to rescue failing franchises, while also allowing them the flexibility to intervene if they believe it's in the best interest of the brand. For a prospective franchisee, this highlights the importance of sound business management and financial planning to avoid default, as reliance on Bombs Away to resolve issues is not guaranteed and can be costly.