What section of the Buff City Soap Development Agreement outlines the reasons for termination with cause?
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, Section 12 of the Development Agreement details the reasons for termination with cause. Specifically, Buff City Soap can terminate the Development Agreement if the franchisee defaults on or fails to comply with their obligations under the Development Agreement, or if any Franchise Agreement between Buff City Soap and the franchisee or their affiliate is terminated.
The Development Agreement further defines "cause" in Sections 12(a), 12(b), 12(c), and 12(d), distinguishing between curable and non-curable defaults. Curable defaults include a 30-day period to correct failures in meeting the Development Schedule, a 5-day cure period for payment failures, and 30 days to rectify any other material breach of the Development Agreement, excluding defaults listed in Paragraph 17.h.
Non-curable defaults, unless prohibited by state law, encompass situations like bankruptcy or insolvency, material misrepresentations or omissions that negatively affect Buff City Soap, felony convictions or unethical conduct by the franchisee or their affiliates that harm the brand, unauthorized transfers, unauthorized disclosure of confidential information, failure to comply with representations and warranties, termination of any Franchise Agreement with the franchisee or their affiliates, failure to pay applicable taxes, three or more defaults within a 12-month period, and failure to comply with applicable law. These detailed provisions provide a comprehensive understanding of the circumstances under which Buff City Soap may terminate the Development Agreement with cause.