In Michigan, what constitutes 'good cause' for Bombs Away to terminate a franchise agreement?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise:
- (c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause.
Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure.
Source: Item 23 — RECEIPTS (FDD pages 36–117)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Michigan law stipulates specific conditions under which Bombs Away can terminate a franchise agreement for "good cause." These conditions are designed to protect franchisees from arbitrary termination. Specifically, good cause includes the franchisee's failure to comply with any lawful provision of the franchise agreement.
For a termination to be valid, Bombs Away must provide the franchisee with written notice of the failure to comply with the franchise agreement. The franchisee must then be given a reasonable opportunity to correct, or "cure," the failure. Michigan law specifies that this cure period does not need to be longer than 30 days. This means that Bombs Away must allow the franchisee at least some time to rectify the issue, but is not obligated to provide a cure period exceeding 30 days.
This provision is important for prospective Bombs Away franchisees in Michigan as it outlines the circumstances under which their franchise can be terminated and the procedures Bombs Away must follow. It ensures that franchisees have an opportunity to address any shortcomings before termination occurs, providing a degree of security and recourse. Franchisees should carefully review the franchise agreement to understand all the provisions they must comply with to avoid termination for cause.