If a Byrider franchisee defaults on an obligation to the company, can this be considered a default under the franchise agreement?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.4 Cross-Default.
Any default by the Franchisee (or any person/company affiliated with the Franchisee) under this Agreement may be regarded as a default under any other agreement between the Company (or any of its affiliates) and the Franchisee (or any of its affiliates).
Any default by the Franchisee (or any person/company affiliated with the Franchisee) under any other agreement, including, but not limited to, any other franchise agreement, between the Company (or any of its affiliates) and the Franchisee (or any person/company affiliated with the Franchisee), and any default by the Franchisee (or any person/company affiliated with the Franchisee) under any obligation to the Company (or any of its affiliates) may be regarded as a default under this Agreement.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, a franchisee's default under any obligation to Byrider or its affiliates can be considered a default under the franchise agreement. This also applies if a person or company affiliated with the franchisee defaults. This is known as a cross-default provision.
Specifically, if a Byrider franchisee (or an affiliate) defaults on any agreement with Byrider (or its affiliates), including other franchise agreements, or defaults on any obligation to Byrider (or its affiliates), Byrider can treat this as a default under the current franchise agreement.
This clause gives Byrider significant leverage, as a franchisee's failure to meet obligations in one area of their relationship with Byrider can trigger consequences for their entire franchise operation. Prospective franchisees should carefully consider all their potential obligations to Byrider and its affiliates to fully understand the risk exposure created by this cross-default provision.