What happens to accrued and unpaid Advances after the termination date of the C3 Wellness Spa agreement?

According to the 2024 C3 Wellness Spa Franchise Disclosure Document, the treatment of outstanding Advances after the termination of the franchise agreement depends on the availability of funds. Specifically, if funds are available in the Revenue Account or the Practice otherwise makes funds available, the Manager will use these funds to pay the Advances on the date of termination, subject to the payment priorities outlined in Section 3.06 of the agreement.

However, if revenue is received by the Practice after the termination date, these revenues will also be applied towards the outstanding Advances, again following the payment priority in Section 3.06. This means that even after the agreement ends, any incoming revenue will be directed to cover these outstanding Advances.

Importantly, the FDD stipulates that the Practice is not obligated to pay any Advances to the Manager following the termination of the agreement if sufficient funds are not available through the Revenue Account or other means. This clause provides a degree of financial protection for the franchisee, limiting their liability for Advances to the extent that the business can support the payments, either at the point of termination or with subsequent revenue. It is important to note that any outstanding Advance plus interest unpaid at the date of termination of this Agreement is due and payable immediately at such date.