What constitutes an Event of Default under the Buff City Soap Development Agreement?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
The occurrence of any of the following will adversely and substantially affect the interests of Franchisor and will be deemed an Event of Default constituting just cause for exercising any of the remedies set forth herein.
- (a) Termination for Events of Default. Franchisor may terminate this Agreement upon delivery to Developer of Notice as a result of the occurrence of any of the following Events of Default and Developer's failure to cure such Event of Default within the cure period described below, if any, and absent a cure period, immediately upon Franchisor's Notice to Developer:
- (1) Developer fails to comply with the Development Schedule during any Development Period pursuant to Section 4 and Exhibit A of this Agreement and fails to cure such default within 30 days after Notice of such Event of Default is delivered to Developer.
- (2) Developer fails to pay any fees or other amounts due hereunder to Franchisor within five days after Notice of nonpayment is delivered to Developer.
- (3) Developer (or any of its Principals or Affiliates) has made any material misrepresentation or omission in connection with this Agreement that negatively impacts Franchisor.
- (4) Developer or any of its Principals is or has been held liable or convicted by a court of law, pleads or has pleaded no contest to, a felony, indictable offense or other unlawful act, engages in any dishonest or unethical conduct or otherwise engages in any act or conduct which Franchisor believes will, if continued, materially and adversely affect the reputation of the Brand, the Makeries, any other Buff City Soap makeries or the goodwill associated with Marks.
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to the 2025 Buff City Soap Franchise Disclosure Document, several actions or failures can trigger an Event of Default under the Development Agreement. These events allow Buff City Soap to terminate the agreement if the developer doesn't correct the issue within a specified cure period, or immediately in some cases.
Specifically, an Event of Default occurs if the developer fails to meet the Development Schedule outlined in Section 4 and Exhibit A of the agreement, and does not rectify this failure within 30 days after receiving notice from Buff City Soap. Another cause for default is failing to pay any fees or amounts owed to Buff City Soap within five days after receiving a nonpayment notice.
Furthermore, the agreement can be terminated if the developer, its principals, or affiliates make any significant misrepresentation or omission that negatively affects Buff City Soap. Finally, if the developer or its principals are convicted of a felony or engage in dishonest or unethical conduct that could harm the reputation of the Buff City Soap brand, this also constitutes an Event of Default.