What section of the Multi-Unit Development Agreement discusses termination by C3 Wellness Spa with cause?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Sections in Multi-Unit Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | 3 | Varies depending on the number of Spa Location Franchises to be developed and the Development Area. The agreement commences on the effective date and the term automatically expires at the earlier of the opening of the final Spa Location Franchise required for development, or the last day of the calendar month in which the final Spa Location Franchise was required to be open under the Multi-Unit Development Agreement. |
| b. | Renewal or extension of the | Not | There is no renewal of the Multi-Unit Development |
| term | applicable | Agreement. | |
| c. | Requirements for franchisee to | Not | There is no renewal of the Multi-Unit Development |
| renew or extend | applicable | Agreement. | |
| d. | Termination by franchisee | Not applicable | There is no option for your termination of the Multi Unit Development Agreement. |
| e. | Termination by franchisor | Not | We can terminate without cause only if you and we |
| without cause | applicable | mutually agree, in writing, to terminate. | |
| f. | Termination by franchisor with "cause" | 3.2 | We may terminate your Multi-Unit Development Agreement with cause. Your Multi-Unit Development Agreement can be terminated by us if: (a) you abandon your obligations under the Multi-Unit Development Agreement; (b) if you for four consecutive months, or any shorter period that indicates an intent by you to discontinue your development of Spa Location Franchises within the Development Area; (c) if you become insolvent or you are adjudicated bankrupt, or if any action is taken by you, or by others against you, under any insolvency, bankruptcy or reorganization act, or if you make an assignment for the benefit or creditors or a receiver is appointed by you; (d) if you fail to meet your development obligations under the Development Schedule for any single Development Period including, but not limited to, your failure to establish, open and/or maintain the cumulative number of Spa Location Franchises in accordance with Development Schedule; and/or (e) in the event that any one Franchise Agreement is terminated respecting any |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–50)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, Section 3.2 of the Multi-Unit Development Agreement outlines the circumstances under which C3 Wellness Spa can terminate the agreement with cause. These reasons include abandoning obligations, discontinuing development of Spa Location Franchises for four consecutive months (or a shorter period indicating intent to discontinue), insolvency or bankruptcy, failure to meet development obligations under the Development Schedule, and termination of any Franchise Agreement related to a Spa Location Franchise.
This means that as a multi-unit developer, you must adhere to the development schedule and maintain solvency to avoid termination. Failure to open and maintain the required number of Spa Location Franchises can lead to termination. The termination of a single franchise agreement can also trigger the termination of the entire Multi-Unit Development Agreement.
It is important for prospective franchisees to carefully review Section 3.2 of the Multi-Unit Development Agreement to fully understand the conditions that could lead to termination. Understanding these conditions is crucial for managing the development schedule and maintaining a healthy business relationship with C3 Wellness Spa.