How long does a Bombs Away franchisee have to cure non-compliance before incurring a non-compliance fee?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
ial progress toward curing the violation within 30 days after receiving written notice from Franchisee detailing the alleged default. Termination by Franchisee is effective 10 days after Bombs Away Franchising receives written notice of termination.
14.2 Termination by Bombs Away Franchising.
- (a) Subject to 10-Day Cure Period. Bombs Away Franchising may terminate this Agreement if Franchisee does not make any payment to Bombs Away Franchising when due, or if Franchisee does not have sufficient funds in its account when Bombs Away Franchising attempts an electronic funds withdrawal, and Franchisee fails to cure such non-payment within 10 days after Bombs Away Franchising gives notice to Franchisee of such breach.
- (b) Subject to 30-Day Cure Period. If Franchisee breaches 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;
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the timeframe for a franchisee to cure non-compliance varies depending on the nature of the breach. If a Bombs Away franchisee fails to make a payment when due or lacks sufficient funds for an electronic withdrawal, they have 10 days after receiving notice from Bombs Away to cure the non-payment. For any other breach not specifically mentioned elsewhere, the franchisee has 30 days after receiving notice to correct the issue to Bombs Away's satisfaction.
However, there are certain situations where Bombs Away can terminate the agreement without offering an opportunity to cure the breach. These include misrepresentation or omission of material facts during the application process, submitting false reports or information, or specific financial issues such as bankruptcy or receivership. Additionally, if the operation of the Bombs Away business poses a significant danger to health or safety, the franchisee has only 48 hours to rectify the situation after becoming aware of it.
It is important to note that these cure periods relate to Bombs Away's right to terminate the franchise agreement. The document does not specify a timeframe for curing non-compliance before a non-compliance fee is incurred. The FDD states that if a franchisee serves a customer outside of their territory without prior written permission, Bombs Away may impose a fee. Also, if Bombs Away conducts an evaluation because of a governmental report, customer complaint, or a default or non-compliance with any System Standard by Franchisee, then Bombs Away may charge all out-of-pocket expenses plus its then-current evaluation fee to Franchisee.
Prospective Bombs Away franchisees should carefully review Article 14 of the franchise agreement, which details the conditions for default and termination. Understanding the specific cure periods and the types of breaches that allow for immediate termination is crucial for managing their business and avoiding potential disputes with Bombs Away. It would be prudent for a potential franchisee to ask Bombs Away about the non-compliance fee and when it is incurred.