In Virginia, if a default or termination ground in the Byrider franchise agreement does not meet the definition of 'reasonable cause' under Virginia law, what is the enforceability of that provision?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
The following language is added to the end of the "Summary" section of Item 17(e), entitled "Termination by Byrider Franchising Partners without cause":
Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any grounds for default or termination stated in the franchise agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Virginia has specific regulations regarding franchise terminations. The Virginia Retail Franchising Act stipulates that it is unlawful for Byrider to cancel a franchise without 'reasonable cause'. This means that if any of the reasons for default or termination listed in the Byrider franchise agreement do not meet the legal definition of 'reasonable cause' under Virginia law, then that particular provision may not be enforceable within the state.
For a prospective Byrider franchisee in Virginia, this is an important protection. It prevents Byrider from terminating the franchise agreement based on arbitrary or unfair reasons that do not align with the state's legal standards for 'reasonable cause'. This ensures that Byrider must have a legitimate and justifiable reason, as defined by Virginia law, to terminate the franchise agreement.
This provision offers a safeguard for franchisees, ensuring that Byrider adheres to Virginia's franchise laws, which are designed to protect franchisees from potentially overbearing or unfair termination practices. Franchisees should consult with a legal professional to fully understand their rights and protections under the Virginia Retail Franchising Act.