If a Bombs Away franchisee is convicted of a felony, is that a curable or non-curable default?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or | Summary |
|---|---|---|
| other agreement | ||
| f. Termination by | § 14.2 | We may terminate your franchise |
| franchisor with cause | agreement for cause, subject to any applicable notice and cure opportunity. | |
| g. “Cause” defined-- | Non-payment by you (10 days to cure); | |
| curable defaults | violate franchise agreement other than non- curable default (30 days to cure). | |
| h. “Cause” defined--non- | Misrepresentation when applying to be a | |
| curable defaults | franchisee; knowingly submitting false information; bankruptcy; violation of law; violation of confidentiality; violation of non-compete; violation of transfer restrictions; slander or libel of us; refusal to cooperate with our audit or evaluation; cease operations for more than 15 consecutive days; three defaults in 12 months; cross-termination; conviction of, or plea to, a felony, commit or be accused of an act that is reasonably likely to materially and unfavorably affect our brand; any other breach of franchise agreement which by its nature cannot be cured. | |
| i. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 28–31)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, a franchisee's conviction of a felony constitutes a non-curable default under the franchise agreement. This means that Bombs Away has the right to terminate the franchise agreement immediately upon such a conviction, without providing the franchisee an opportunity to correct or remedy the situation.
This provision is significant for prospective Bombs Away franchisees as it highlights the importance of maintaining a clean legal record. A felony conviction can have severe consequences, leading to the loss of the franchise and the associated investment. This is stricter than some franchise agreements, which might allow a cure period for certain legal violations.
The FDD specifies other events that also constitute non-curable defaults, such as misrepresentation during the application process, bankruptcy, violation of confidentiality or non-compete agreements, and slander or libel of Bombs Away. Franchisees should be aware of all these conditions, as any of them could lead to immediate termination of the franchise agreement.
It is important for potential Bombs Away franchisees to fully understand the implications of these termination clauses and to seek legal counsel to assess the risks associated with these terms. Understanding what constitutes a non-curable default can help franchisees avoid actions that could jeopardize their investment and the future of their Bombs Away franchise.