How is 'Cause' defined for termination of the Bw Premier Collection Distribution Agreement?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. | | 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). | Prior to such notice of cancellation, the Party alleging "cause" shall provide the other Party written notice of the "cause" and, if the breach is capable of being cured, allow for a fifteen (15) day cure period. For purposes of this Agreement, "cause" shall be defined as a Party's breach of a material term of this Agreement (e.g., if the
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 41–44)
What This Means (2025 FDD)
According to the 2025 Bw Premier Collection Franchise Disclosure Document, "cause" for termination of the Distribution Agreement is defined as a party's breach of a material term of the agreement. If one party alleges "cause", they must provide written notice to the other party, allowing a 15-day cure period if the breach is capable of being cured. This means that Bw Premier Collection can terminate the agreement with a hotel owner if the hotel owner violates a significant part of the agreement, but only after giving the hotel owner an opportunity to fix the issue.
This definition of "cause" is fairly standard in franchising. It protects both Bw Premier Collection and the franchisee by ensuring that terminations are based on substantial violations rather than minor infractions. The requirement of a cure period further protects the franchisee, giving them a chance to rectify the breach and maintain the franchise relationship. However, the FDD does not define what constitutes a 'material term' which leaves room for interpretation and potential disputes.
It is important to note that the specific terms and conditions regarding termination may vary based on state laws. For instance, in Virginia, it is unlawful for a franchisor to cancel a franchise without "reasonable cause," and any grounds for default or termination stated in the franchise agreement must constitute "reasonable cause" as defined by Virginia law to be enforceable. Similarly, Minnesota law requires Bw Premier Collection to provide a 90-day notice of termination (with 60 days to cure) and 180 days' notice of non-renewal, except in certain specified cases.
Prospective Bw Premier Collection franchisees should carefully review the Distribution Agreement and any state-specific riders to fully understand their rights and obligations regarding termination. They should also seek legal counsel to ensure they understand the implications of the "cause" definition and how it applies to their specific circumstances. Understanding these provisions is crucial for protecting their investment and ensuring a smooth franchise relationship.