How many defaults in a 12-month period can lead to termination of a Bombs Away franchise?
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, the franchisor can terminate the franchise agreement if the franchisee has three defaults within a 12-month period. This falls under the definition of "cause" for termination related to non-curable defaults.
This means that if a Bombs Away franchisee commits three separate violations of the franchise agreement within a single year, regardless of whether they are given an opportunity to correct the issues, Bombs Away has grounds to terminate the agreement. This is a critical point for prospective franchisees to understand, as it highlights the importance of strict adherence to the franchise agreement to avoid potential termination.
Many franchise agreements include clauses allowing termination for repeated violations, but the specific number of violations and the timeframe can vary. Franchisees should be aware of all the ways they could potentially default on their agreement and what steps they can take to prevent this from happening. Understanding these terms is essential for maintaining a healthy and stable franchise relationship with Bombs Away.