If a Buns On Fire franchisee cures a default during the notice period, what is the result?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
With respect to franchisees governed by Minnesota law, we will comply with Minn. Stat. Sec. 80C.14, Subds. 3, 4, and 5 which require, except in certain specified cases, that a franchisee be given ninety (90) days' notice of termination (with sixty (60) days to cure) and one hundred eighty (180) days' notice of non-renewal of the Franchise Agreement, and that consent to the transfer of the franchise not be unreasonably withheld.
Franchisor's exercise of Franchisor's rights under Section 17.5. (Other Remedies) will not (a) be a defense for Franchisee to Franchisor's enforcement of any other provision of this Agreement or waive or release Franchisee from any of Franchisee's other obligations under this Agreement, (b) constitute an actual or constructive termination of this Agreement, or (c) be Franchisor's sole or exclusive remedy for Franchisee's default. Franchisee must continue to pay all fees and otherwise comply with all of Franchisee's obligations under this Agreement (except as set forth in Section 17.5(h) (Franchisor's assumption of management)) following Franchisor's exercise of any of these rights. If Franchisor exercises any of Franchisor's rights under Section 17.5, we may thereafter terminate this Agreement without providing Franchisee any additional corrective or cure period, unless the default giving rise to Franchisor's right to
terminate this Agreement has been cured to Franchisor's reasonable satisfaction.
Upon written notice to Franchisee, Franchisor may, without right to cure, immediately terminate this Agreement upon the occurrence of any of the following events of default:
- (i.) Any action by Franchisee, any of his/her partners, if Franchisee is a partnership, or any of its officers, directors or stockholders, if Franchisee is a corporation, or any of its members or managers, if Franchisee is a limited liability company, which results in:
-
- An affirmative act of insolvency;
-
- An assignment for the benefit of creditors;
-
- The filing of a petition under any bankruptcy, reorganization, insolvency, or moratorium law, or any law for the relief of, or relating to, debtors, except with respect to any relief permitted under the Federal Bankruptcy Code; or
-
- Violation of the Anti-Terrorism Laws, as described in Article XXXVII hereof.
-
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, the consequences of curing a default depend on the nature of the default and the specific circumstances. For franchisees governed by Minnesota law, Buns on Fire will comply with Minnesota Statutes Section 80C.14, Subds. 3, 4, and 5, which generally require that a franchisee be given ninety (90) days' notice of termination (with sixty (60) days to cure) and one hundred eighty (180) days' notice of non-renewal of the Franchise Agreement. Consent to the transfer of the franchise cannot be unreasonably withheld. This suggests that curing a default within the specified timeframe may prevent termination or non-renewal, at least in Minnesota.
However, the FDD also states that if Buns on Fire exercises any of its rights under Section 17.5 (Other Remedies) due to a franchisee's default, Buns on Fire may subsequently terminate the Franchise Agreement without providing any additional corrective or cure period. This is conditional, as it only applies if the initial default that led to Buns on Fire's actions under Section 17.5 has been cured to Buns on Fire's reasonable satisfaction. This implies that even if a franchisee attempts to cure a default, Buns on Fire retains some discretion in deciding whether the cure is sufficient to prevent further action, including termination.
Furthermore, there are certain events of default that allow Buns on Fire to immediately terminate the agreement without any opportunity to cure. These include actions indicating insolvency, assignments for the benefit of creditors, the filing of certain bankruptcy petitions, or violations of Anti-Terrorism Laws. Therefore, the franchisee's ability to prevent termination by curing a default depends heavily on the specific default in question and whether it falls under the exceptions that allow for immediate termination.
In summary, while curing a default during the notice period may prevent termination under normal circumstances, especially in Minnesota due to state-specific regulations, Buns on Fire retains the right to terminate the agreement without an additional cure period if they have already exercised other remedies, unless the default is cured to their satisfaction. Additionally, certain severe defaults allow for immediate termination without any opportunity to cure. A prospective franchisee should carefully review Article XVII of the Franchise Agreement to fully understand the conditions under which defaults can be cured and the circumstances that allow for immediate termination.