Under the Byrider agreement, can a default by a person affiliated with the franchisee be considered a default under the franchise agreement?

According to Byrider's 2025 Franchise Disclosure Document, a default by a person or company affiliated with the franchisee can be considered a default under the franchise agreement. This is known as a cross-default provision. Specifically, any default by the franchisee or an affiliated entity under the franchise agreement itself can be regarded as a default under any other agreement between Byrider (or its affiliates) and the franchisee (or its affiliates).

Furthermore, the reverse is also true. Any default by the franchisee or an affiliated entity under any other agreement with Byrider or its affiliates, including other franchise agreements or any obligation to Byrider or its affiliates, can be considered a default under the current franchise agreement. This creates a broad scope for cross-default, linking all agreements and obligations between the parties.

For a prospective Byrider franchisee, this cross-default provision has significant implications. It means that a default in one area of their business relationship with Byrider could trigger a default across all their Byrider ventures. For example, if a franchisee has multiple Byrider locations and defaults on payments for one, Byrider could consider this a default on all franchise agreements with that franchisee. This clause increases the risk for franchisees, as it broadens the circumstances under which Byrider can declare a default and potentially terminate the franchise agreement.