factual

Under what conditions can Bombs Away unilaterally terminate a franchise agreement?

Bombs_Away Franchise · 2024 FDD

Answer from 2024 FDD Document

s Agreement and fails to cure or to make substantial 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;
  • (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;
  • (viii) Franchisee refuses to cooperate with or permit any audit or evaluation by Bombs Away Franchising or its agents or contractors, or otherwise fails to comply with Section 10.5 or Section 11.2.
  • (ix) the Business is operated in a manner which, in Bombs Away Franchising's reasonable judgment, constitutes a significant danger to the health or safety of any person, and Franchisee fails to cure such danger within 48 hours after becoming aware of the danger (due to notice from Bombs Away Franchising or otherwise);
  • (x) Franchisee has received two or more notices of default and Franchisee commits another breach of this Agreement, all in the same 12-month period;
  • (xi) Bombs Away Franchising (or any affiliate) terminates any other agreement with Franchisee (or any affiliate) due to the breach of such other agreement by Franchisee (or its affiliate);
  • (xii) Franchisee or any Owner is charged with, pleads guilty or no-contest to, or is convicted of a felony; or
  • (xiii) Franchisee or any Owner is accused by any governmental authority or third party of any act, or if Franchisee or any Owner commits any act or series of acts, that in Bombs Away Franchising's opinion is reasonably likely to materially and unfavorably affect the Bombs Away brand.

Source: Item 22 — CONTRACTS (FDD pages 35–36)

What This Means (2024 FDD)

According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away Franchising can terminate the franchise agreement under several conditions, with and without an opportunity for the franchisee to cure the breach.

Bombs Away may terminate the agreement if the franchisee fails to make payments when due, including instances of insufficient funds for electronic withdrawals, and fails to cure the non-payment within 10 days of notice. For breaches not specifically mentioned elsewhere, Bombs Away can terminate if the franchisee fails to correct the breach within 30 days after receiving notice.

However, Bombs Away Franchising can terminate the agreement immediately, without allowing the franchisee an opportunity to cure, if the franchisee misrepresented or omitted material facts during the application process or breaches any representation in the agreement. Immediate termination is also possible if the franchisee knowingly submits false reports or information to Bombs Away Franchising. Additional causes for termination without cure include events such as the appointment of a receiver or trustee for the business, the franchisee's inability to pay debts, bankruptcy filings, or failure to open the business by the date specified. Furthermore, Bombs Away can terminate the agreement without opportunity to cure if the franchisee commits a material violation of compliance with laws or confidentiality, violates non-compete or transfer agreements, abandons the business for more than 15 days, slanders Bombs Away, refuses to cooperate with audits, operates the business in a way that endangers health or safety without curing the danger within 48 hours, receives multiple default notices within a 12-month period, has another agreement with Bombs Away terminated due to breach, is charged with or convicted of a felony, or commits an act that could negatively affect the Bombs Away brand.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.