What is the look-back period for default status when renewing a Buff City Soap franchise?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
| d. | Termination by you | N/A | You |
|---|---|---|---|
| may terminate under any grounds permitted by | |||
| applicable | |||
| law. | |||
| e. | Termination | N/A | Not Applicable. |
| by | |||
| us | |||
| Without cause | |||
| f. | Termination by us with cause | 12 | We may terminate your Development Agreement only if you default or fail to comply with your obligations under the Development Agreement or if a Franchise Agreement between us and you or your affiliate is terminated. |
| g. | "Cause" defined - curable defaults | 12(a) | Curable defaults include 30 days to cure failure to comply with the Development Schedule during any Development Period; five days to cure any failure to make payments owed to us; and 30 days for failure to comply with any other material provision of the Development Agreement (other than the defaults listed in Paragraph 17.h. below). |
| h. | "Cause" defined - non curable defaults | 12(a), 12(b), 12(c) and 12(d) | Except as prohibited under state law, non-curable defaults include bankruptcy or insolvency (our right to terminate may not be enforceable under bankruptcy law); material misrepresentation or omission by you or your principals or affiliates that negatively affect us; you or your principals or affiliates being held liable or convicted of a felony, indictable offense or other unlawful act or you or your principals or affiliates engaging in any dishonest or unethical conduct or act that may materially or adversely affect the Brand, the System or goodwill associated with the Marks; any unauthorized transfer pursuant to Section 11 by you or any of your principals or affiliates; any unauthorized disclosure or use of our Confidential Information, the Manuals, the Marks; or our Trade Secrets; any failure by you, your principals or your Designated Principal to comply with the representations, warranties and covenants in the Development Agreement; termination by us of any Franchise Agreement with you or any of your affiliates; failure to pay any taxes applicable to the operation of your business under the Development Agreement, absent a good faith dispute; three or more defaults within 12-month period, regardless of whether corrected after notice of such failure; and failure to comply with applicable law. |
Source: Item 16 — Restrictions on What the Franchisee May Sell (FDD pages 49–59)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, the Development Agreement cannot be renewed or extended. However, the document does outline conditions under which Buff City Soap can terminate the Development Agreement with cause. One such condition involves multiple defaults within a specific timeframe.
Specifically, Buff City Soap can terminate the Development Agreement if there are "three or more defaults within 12-month period, regardless of whether corrected after notice of such failure." This means that if a franchisee has three or more instances of failing to meet their obligations within a single year, even if they fix the issues after being notified, Buff City Soap has grounds to terminate the agreement.
This policy creates a significant risk for franchisees. Even minor or unintentional errors could accumulate and lead to termination if they occur frequently within a 12-month window. Prospective franchisees should carefully review the Development Agreement to fully understand what constitutes a default and implement strong operational controls to minimize the risk of multiple defaults. They should also seek clarification from Buff City Soap regarding how this policy is applied in practice and whether any exceptions are possible.