Under what circumstances can Byrider terminate the Franchise Agreement before the franchisee's business opens?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
16.1 The Company's Right to Terminate Prior to Opening.
- A. The Company shall have the right to terminate this Agreement forthwith if:
- (1) Prior to the Franchisee's Business opening, the Franchisee shall have failed to satisfactorily complete the Initial Training Program as required herein. The Franchisee acknowledges that because of the Company's skill and knowledge with respect to the training and skill required to manage the Business, its decision whether or not the Franchisee has satisfactorily completed such training may be made by the Company in the good faith exercise of its sole, subjective judgment;
- (2) The Franchisee's Business is not opened to the public for business within one (1) year of the execution of this Agreement;
- (3) Any financial, personal or other information provided by the Franchisee to the Company in connection with the Franchisee's application for the franchise is materially false, misleading, incomplete or inaccurate.
- B. If the Company elects to terminate this Agreement pursuant to this Section, the Company shall notify the Franchisee of its election. If, at the time of such termination, the Franchisee has entered into a binding lease or purchase agreement for the Business Location or has entered into binding purchase orders for the purchase of equipment or fixtures to be installed in the Business Location, the Company shall have the right but not the obligation to require the Franchisee to use its best efforts to assign its rights under the lease, purchase agreements and purchase orders to the Company or its designee. If the Company elects, and such assignments are made, the Company or its designee shall assume all of Franchisee's obligation under such lease, purchase agreements and purchase orders. If the Company exercises its right to terminate pursuant to this Article, this Agreement shall be null, void and of no effect, and neither party shall have any further right or obligation to the other except those obligations which, by their nature, survive such termination.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Byrider has the right to terminate the Franchise Agreement before the franchisee's business opens under specific circumstances. These include failing to satisfactorily complete the Initial Training Program, not opening the business to the public within one year of signing the agreement, or providing materially false, misleading, incomplete, or inaccurate information during the franchise application process.
The FDD specifies that Byrider's decision regarding satisfactory completion of the training program is based on their sole, subjective judgment, exercised in good faith. This means Byrider has significant discretion in determining whether a franchisee meets their training standards. If Byrider terminates the agreement under these conditions, they must notify the franchisee.
Furthermore, if the franchisee has already entered into a lease or purchase agreements for the business location or equipment, Byrider has the option to require the franchisee to assign these agreements to Byrider or its designee. If Byrider chooses to exercise this option, they will assume the franchisee's obligations under those agreements. Upon termination, the agreement becomes null and void, releasing both parties from further obligations, except for those that naturally survive termination.