Can Bor Restoration terminate the franchise agreement without cause?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| e. Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. Termination by franchisor with cause | 10 | We can terminate only if you default. See (g) and (h) below. |
| g. "Cause" defined - curable defaults | 10 | Failure to pay fees after five days' notice; 30 days to cure any defaults under the Franchise Agreement except those described in (h) below. We have the right to manage the Business temporarily. |
| h. "Cause" defined - non-curable defaults | 10 | Non-curable defaults, abandonment, bankruptcy, felonies, material judgment against you, failed criminal background check, poor credit check, |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 33–35)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, Bor Restoration cannot terminate the franchise agreement without cause. Item 17 summarizes the conditions for termination, stating that Bor Restoration can only terminate the agreement if the franchisee defaults.
The FDD outlines two categories of defaults: curable and non-curable. Curable defaults include failure to pay fees after five days' notice, with a 30-day period to remedy other defaults under the Franchise Agreement. Non-curable defaults include abandonment, bankruptcy, felonies, material judgments against the franchisee, failed criminal background checks, and poor credit checks.
Additionally, non-curable defaults can arise from misuse of trademarks or proprietary information, repeated breaches of curable covenants, illegal transfers, violations of laws applicable to the business, criminal or civil convictions, material misrepresentations, failure to obtain permission, failure to pay taxes, underreporting, complaints against the business, disparagement of Bor Restoration, and failure to add new goods, services, or technology. Some violations of the Franchise Agreement may have their own cure provisions. These stipulations protect the franchisee, ensuring Bor Restoration must have a legitimate reason based on the franchisee's actions to terminate the agreement.