What is the purpose of the 'Wind Down Period' after a Byrider franchise termination notice?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
nation of this Agreement pursuant to Section 16.2A or Section 16.2B shall be automatically effective sixty (60) days after delivery of the notice of termination, provided that a termination for default pursuant to Section 16.2B(1), 16.2A(3) or 16.2A(4), shall be effective ten (10) days after delivery of the notice of termination. The Franchisee acknowledges and agrees that, upon delivery of this notice of termination, Franchisee shall have no additional opportunity to cure the default based upon which the Company terminated this Agreement. The Franchisee further acknowledges and agrees that the sixty (60) day (or ten (10) day period if terminated pursuant to Section 16.2B(1) or pursuant to 16.2A(4)) (referred to herein as the "Wind Down Period") shall be used by Franchisee for the sole purpose of winding down the Franchisee's Business and, during such period, the Franchisee must continue to operate the Franchisee's Business pursuant to the terms of this Agreement.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to the 2025 Byrider Franchise Disclosure Document, the 'Wind Down Period' following a termination notice is specifically designated to allow the franchisee to wind down their business operations while still adhering to the terms of the franchise agreement. This period is either sixty days or ten days, depending on the reason for termination. The standard wind-down period is sixty days after the delivery of the termination notice. However, if the termination is due to a default, as outlined in specific sections of the agreement (16.2B(1), 16.2A(3), or 16.2A(4)), the wind-down period is shortened to ten days after the notice.
During this Wind Down Period, Byrider franchisees are expected to continue operating their business under the existing franchise agreement terms. This means maintaining standards and fulfilling obligations as if the termination notice had not been issued. However, Byrider retains the right to eliminate the wind-down period entirely if the franchisee engages in conduct that, in Byrider's reasonable opinion, damages the goodwill and reputation of the company, its trademarks, or the overall system. In such cases, the termination becomes effective immediately upon written notice.
Furthermore, the FDD states that Byrider franchisees must use the Wind Down Period to fulfill their obligations as outlined in Section 17.1 of the agreement. Within ten days of the termination's effective date, the franchisee must provide Byrider with evidence of compliance with these obligations. This ensures an orderly transition and protects Byrider's interests by requiring franchisees to meet all necessary requirements even as they cease operations. This includes activities such as collecting receivables and providing transitional assistance, not to exceed 90 days.
In summary, the Wind Down Period serves a dual purpose: it allows Byrider franchisees time to close their business responsibly while ensuring they continue to meet their contractual obligations and uphold the brand's reputation. It also provides Byrider with a mechanism to protect its interests and ensure a smooth transition, with the option to expedite the termination if the franchisee's actions threaten the brand's goodwill.