Does the termination clause for Bombs Away franchises apply differently to owners versus franchisees?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
e, 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;
- (v) Franchisee or any Owner commits a material violation of Section 7.2 (compliance with laws) or Section 13.1 (confidentiality), violates Section 13.2 (non-compete) or Article 15 (transfer), or commits any other violation of this Agreement which by its nature cannot be cured;
- (vi) Franchisee abandons or ceases operation of the Business for more than 15 consecutive days;
- (vii) Franchisee or any Owner slanders or libels Bombs Away Franchising or any of its employees, directors, or officers;
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, certain termination clauses apply to both the franchisee and any owner of the franchise. Specifically, Bombs Away can terminate the franchise agreement without an opportunity to cure if the franchisee misrepresented or omitted material facts when applying to be a franchisee, or breaches any representation in the agreement.
Additionally, Bombs Away can terminate the agreement if the franchisee or any owner commits a material violation of compliance with laws or confidentiality, violates non-compete agreements or transfer restrictions, or commits any other violation that cannot be cured. The agreement can also be terminated if the franchisee or any owner slanders or libels Bombs Away or its employees. Further, if a franchisee or any owner is charged with, pleads guilty or no-contest to, or is convicted of a felony, Bombs Away can terminate the agreement.
Bombs Away can also terminate the agreement if a franchisee or any owner is accused by any governmental authority or third party of any act, or commits any act or series of acts, that in Bombs Away's opinion is reasonably likely to materially and unfavorably affect the Bombs Away brand. These stipulations mean that owners are held to similar standards as franchisees, and their actions can also lead to the termination of the franchise agreement.