What happens if a Burneys Sweets More franchisee is dissolved?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
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Upon termination, expiration, or non-renewal of this Agreement, regardless of such reason for termination, expiration, or non-renewal, all rights granted hereunder to Franchisee shall terminate and revert to Franchisor, and Franchisee shall have the following obligations:
(a) Cease to Operate. Franchisee shall immediately cease to operate the business licensed under this Agreement, and shall not thereafter, directly or indirectly, represent to the public or hold itself out as a BURNEY'S SWEETS & MORE franchisee with respect to such business.
(b) Cease to use Information. Franchisee shall immediately and permanently cease to use, in any manner whatsoever, all confidential information, methods, procedures and techniques used by or associated with the System, and the proprietary mark BURNEY'S SWEETS & MORE and all other Marks and distinctive forms, slogans, signs, symbols, logos, trade dress, décor, branding materials and devices associated with the BURNEY'S SWEETS & MORE Chain.
(c) Return Franchisor's Property. Franchisee shall immediately return to Franchisor any property held or used by Franchisee which is owned by Franchisor, including the Customer Lists and Franchised Business Data, and shall cease to use, and either destroy or convey to Franchisor, all signs, advertising materials, displays, stationery, forms, and any other materials that bear or display the Marks. Franchisee shall deliver to Franchisor all login credentials associated with any directory, marketing, Computer Systems, Online Presences, and all other accounts and systems affiliated with the Franchised Business. Franchisee shall immediately deliver to Franchisor all manuals, policy and procedure statements, instructions, Brand Standards Manual, and other materials related to operating the Shop, including, without limitation, brochures, charts and any other materials provided by Franchisor and all copies thereof, and shall neither retain nor convey to another any copy or record of any of the foregoing.
(d) Cancel Assumed Names. Franchisee shall take such actions as may be necessary to cancel any assumed name or similar registration which contains the mark BURNEY'S SWEETS & MORE or any other Marks of Franchisor, and Franchisee shall furnish Franchisor with evidence satisfactory to Franchisor of compliance with its obligation within thirty (30) days after termination, expiration, or non-renewal of this Agreement.
(e) Pay All Sums Due. Franchisee shall promptly pay all sums owed to Franchisor upon request. Such sums shall include all damages, costs, losses, and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of the default and the termination. Any outstanding obligations to Franchisor shall give rise to and remain, until paid in full, a lien in favor of Franchisor against any and all of the personal property, furnishings, equipment, signs, fixtures and inventory owned by Franchisee located on the Premises on the date this Agreement is terminated, expires, or does not renew. Within fifteen (15) days of the date of expiration, termination, or non-renewal of this Agreement, Franchisee shall pay in full all of the creditors and suppliers to the Franchised Business.
(f) Pay All Subsequent Amounts. Franchisee shall promptly pay to Franchisor all damages, costs and expenses including reasonable attorneys' fees, incurred by Franchisor subsequent to the termination, expiration, or non-renewal of this Agreement in obtaining injunctive or other relief for the enforcement of any term, covenant or provision of this Agreement.
(g) Cease use of Marks. Franchisee shall immediately and permanently cease to use, in any manner whatsoever, the Mark "BURNEY'S SWEETS & MORE" and all other Marks and distinctive forms, slogans, signs, symbols, logos and devices associated with the BURNEY'S SWEETS & MORE Chain and System.
(h) Cooperate with Franchisor's Assumption Rights. Franchisor shall have the option, to be exercised within thirty (30) days of termination, non-renewal, or expiration of this Agreement, to assume Franchisee's assumed name or equivalent registration and business licenses, telephone numbers, telephone directory listings and advertisements (whether in print or part of an Internet directory), and e-mail addresses and/or Internet domain names which contain the Mark of Franchisor or its affiliates, and Franchisee shall sign all documents necessary to permit Franchisor to assume Franchisee's rights in such items. If Franchisor elects not to exercise this option, Franchisee shall take all action necessary to cancel each of the items listed above and shall furnish Franchisor with evidence satisfactory to prove its compliance within fifteen (15) days after receiving notice of Franchisor's termination, expiration, or non-renewal of this Agreement and the expiration of the option granted herein. In the event Franchisee fails to timely do so, Franchisor shall have the right, for which purpose Franchisee hereby appoints Franchisor as its attorney-infact, to obtain such cancellation on Franchisee's behalf and at Franchisee's expense.
(i) Comply with Covenants. Franchisee and its Owners shall comply with the covenants contained in this Agreement, including, but not limited to, the covenants not to compete or solicit and the covenants not to disclose trade secrets or confidential information.
(j) Leased Premises. Franchisee shall, if Franchisor so requests, assign to Franchisor or its designee any interest which Franchisee has in any lease for the Premises or any other agreement related to the Premises. Franchisee will do whatever is necessary to effectuate and complete the assignment.
(k) Owned Premises. Franchisee shall, if Franchisor so requests and if Franchisee owns the real property on which the Shop is located, lease the Premises to Franchisor on substantially the same terms and conditions contained in Franchisee's lease for the Premises, or if no lease exists or if the existing lease is not commercially reasonable, then on commercially reasonable terms. The lease shall be for an initial five (5) year term, with two (2) five (5) year renewal terms (at Franchisor's option). If the parties cannot agree on the rent to be charged under
the lease within thirty (30) days after the expiration, termination, or non-renewal of the Agreement, the rent will be determined by a qualified independent appraiser. Franchisee and Franchisor shall each present their proposed rent, and the independent appraiser will select the most commercially reasonable rent from the two proposals. The independent appraiser's determination will be binding on the parties. If the parties are not able to agree on an independent appraiser within forty-five (45) days of the termination, non-renewal, or expiration of this Agreement, each party will select an independent appraiser. The independent appraisers chosen will then select a third independent appraiser whose determination will be binding on the parties. The parties agree to select their respective appraisers within fifty-five (55) days after the termination, non-renewal, or expiration of this Agreement and the two appraisers chosen are obligated to appoint the third appraiser within fifteen (15) days after the date on which the last of the two party-appointed appraisers is appointed. Franchisor and Franchisee will bear the cost of their own appraisers and share equally the reasonable fees and expenses of the third appraiser. The parties will take reasonable actions to cause the third appraiser to complete his or her appraisal within fifteen (15) days after the third appraiser's appointment. During the period when the parties are determining the rent and having the appraisal, Franchisor shall have the right but not the obligation to occupy the Premises. Promptly after the determination of the rent, Franchisor shall pay any rent due to Franchisee for any time Franchisor occupied the Premises while the rent was being determined.
(l) Franchisor's Right to Purchase. If Franchisor requests, Franchisee shall sell to Franchisor any assets used in connection with the operation of Franchisee's Shop. Franchisor has the right, but not the obligation, to exercise this right by providing Franchisee written notice of Franchisor's election within sixty (60) calendar days after the termination, non-renewal, or expiration of this Agreement and paying Franchisee the book value for such assets within sixty (60) calendar days of such notice. For purposes of this paragraph, "book value" means the amount Franchisee actually paid for the assets less depreciation (calculated by using the straight-line depreciation method on a ten (10) year depreciation schedule irrespective of the depreciation method or schedule Franchisee uses for accounting purposes). Notwithstanding the foregoing, to the extent that Franchisor exercises Franchisor's right to purchase any assets that is subject to a lease or finance agreement, the purchase price of such assets shall equal the amount of Franchisee's remaining obligations under the lease or finance agreement, as applicable. Franchisor shall be entitled to offset the purchase price by the amount of money owed by Franchisee to Franchisor for any payments necessary to acquire clear title to property or for any other debt. If Franchisor exercises Franchisor's option to purchase, pending the closing of such purchase, Franchisor has the right to appoint a manager to maintain operation of the Shop, or Franchisor may require that Franchisee close the Shop during such period without removing any assets.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Burneys Sweets More FDD, if the Franchise Agreement is terminated, expires, or is not renewed, the franchisee must stop operating the business and cannot present themselves as a Burneys Sweets More franchisee. The franchisee must also stop using all confidential information, methods, and trademarks associated with the Burneys Sweets More system. This includes the brand name, logos, slogans, and other distinctive elements of the chain. The franchisee is obligated to return any property belonging to Burneys Sweets More, such as customer lists, business data, manuals, and advertising materials. They must also cancel any assumed names or registrations that include Burneys Sweets More trademarks.
Burneys Sweets More has the right to access the premises to ensure compliance with these post-termination obligations. This includes removing signs, trade dress, and equipment that identify the location as a Burneys Sweets More shop. If the termination is due to the franchisee's default, or if the franchisee attempts to terminate the agreement without permission, the franchisee must pay liquidated damages to Burneys Sweets More. These damages are calculated based on the average monthly royalty fees and brand fund contributions owed by the franchisee during the 52-week period before they ceased operating the business, multiplied by the lesser of 104 or the number of weeks remaining in the agreement term.
The franchisee is responsible for paying all outstanding sums to Burneys Sweets More upon request, including damages, costs, losses, and expenses resulting from the default and termination. Any unpaid obligations will result in a lien in favor of Burneys Sweets More against the franchisee's personal property at the premises. The franchisee must also pay all creditors and suppliers of the franchised business within 15 days of the termination, expiration, or non-renewal. Burneys Sweets More has the option to assume the franchisee's assumed name, business licenses, telephone numbers, directory listings, and internet domain names containing the Burneys Sweets More mark within 30 days of termination, non-renewal, or expiration.
Furthermore, the franchisee is subject to a non-solicitation covenant, preventing them from soliciting vendors or customers of the Burneys Sweets More shop for a competitive business during a specified restrictive period and within a defined restrictive territory. This territory includes the location of the franchised business, the franchisee's territory, territories where Burneys Sweets More or its affiliates operate, territories of other Burneys Sweets More franchisees, and an area within a 10-mile radius of the franchised business location. The franchisee also agrees not to disparage Burneys Sweets More or its brand.