How is 'cause' defined in the Bw Premier Collection Distribution Agreement regarding curable defaults?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN DISTRIBUTION AGREEMENT | SUMMARY |
|---|---|---|
| a. Length of the franchise term | Section 1(a) of the Distribution Agreement. | The Effective Date of the Distribution Agreement is the date of execution. The Term of the Distribution Agreement begins on the first day the Hotel is activated on our reservations system and ends on December 31st of the year that is the 10th anniversary (“Term”). |
| b. Renewal or extension of the term | Section 1(a) of Distribution Agreement. | The Term automatically renews for successive 10-year terms unless one party provides the other party with written notice of its intent not to renew at least 6 months before the end of the then-current Term. |
| c. Requirements for Hotel Owner to renew or extend | Section 1(a) of Distribution Agreement. | The Term automatically renews for successive 10-year terms unless one party provides the other party with notice of its intent not to renew at least 6 months before the end of the then-current Term. You are not required to sign a new Distribution Agreement upon renewal. |
| d. Termination by | Sections 1(a), 1(b) | The Hotel Owner can terminate the Distribution |
| Hotel Owner | and 1(c) of the | Agreement (1) at any time upon providing 1 years’ |
| PROVISION | SECTION IN DISTRIBUTION AGREEMENT | SUMMARY |
| Distribution Agreement. | prior written notice or (2) upon 30 days’ notice with cause if we do not cure within 15 days of receiving written notice of the cause (if the breach is capable of being cured). (Subject to state law). | |
| e. Termination by licensor without cause | Sections 1(a) and 1(b) of the Distribution Agreement. | We can terminate the Distribution Agreement at any time upon providing 1 years’ prior written notice. |
| f. Termination by licensor with cause | Section 1(c) of the Distribution Agreement. | We can terminate the Distribution Agreement upon 30 days’ notice with cause if you do not cure within 15 days of receiving written notice of the cause (if the breach is capable of being cured). |
| g. “Cause” defined - curable defaults | Section 1(c) of the Distribution Agreement. | “Cause” is defined as a party’s breach of a material term of the Distribution Agreement. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 41–44)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, 'cause' for curable defaults is defined as a party's breach of a material term within the Distribution Agreement. This definition is important because it outlines the circumstances under which Bw Premier Collection or the Hotel Owner can terminate the agreement if the breaching party fails to correct the issue within a specified timeframe.
Specifically, if one party alleges 'cause,' they must provide written notice to the other party, detailing the nature of the breach. If the breach is something that can be fixed or 'cured,' the breaching party is given a 15-day period to do so. If the party successfully cures the breach within this timeframe, termination is avoided. However, if the breach is not cured within the 15-day period, the other party can then proceed to cancel the Distribution Agreement with a 30-day notice.
This clause provides a mechanism for addressing serious violations of the agreement while also offering an opportunity for resolution before termination. It is important for prospective Bw Premier Collection franchisees to understand what constitutes a 'material term' in the Distribution Agreement, as breaching such terms could lead to termination if not properly addressed within the cure period. Franchisees should seek legal counsel to fully understand their rights and obligations under the agreement.