Under the Bombs Away franchise agreement, what options does Bombs Away Franchising have regarding a franchisee operating the business after the expiration of the term?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.10 Holdover. If Franchisee continues operating the Business after the expiration of the term without a renewal agreement or successor franchise agreement executed by the parties in accordance with Section 3.2, then at any time thereafter (regardless of any course of dealing by the parties), Bombs Away Franchising may by giving written notice to Franchisee (the "Holdover Notice") either (i) require Franchisee to cease operating the Business and comply with all postclosing obligations effective immediately upon giving notice or effective on such other date as Bombs Away Franchising specifies, or (ii) bind Franchisee to a renewal term of 5 years, and deem Franchisee and its Owners to have made the general release of liability described in Section 3.2(vi).
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 has specific options if a franchisee continues to operate the business after the franchise term expires, without a renewal or successor agreement. Bombs Away Franchising can issue a written Holdover Notice to the franchisee.
Per the Holdover Notice, Bombs Away Franchising has two options. First, Bombs Away Franchising can require the franchisee to immediately cease operating the business and comply with all post-closing obligations. Alternatively, Bombs Away Franchising can bind the franchisee to a renewal term of 5 years.
If Bombs Away Franchising chooses to bind the franchisee to a renewal term, the franchisee and its owners are deemed to have made a general release of liability as described in another section of the franchise agreement.