Under what circumstances can C3 Wellness Spa terminate the Multi-Unit Development Agreement 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, the franchisor can terminate the Multi-Unit Development Agreement with cause under specific circumstances. These circumstances include abandoning obligations under the agreement, discontinuing development of Spa Location Franchises within the Development Area for four consecutive months (or a shorter period indicating intent to discontinue), or becoming insolvent or bankrupt.
C3 Wellness Spa can also terminate the agreement if the franchisee fails to meet development obligations under the Development Schedule for any single Development Period. This includes failing to establish, open, and/or maintain the cumulative number of Spa Location Franchises as per the Development Schedule. Additionally, the termination of any single Franchise Agreement related to a Spa Location Franchise or any other franchise agreement with C3 Wellness Spa can lead to the termination of the Multi-Unit Development Agreement.
These termination conditions are important for prospective multi-unit franchisees to understand. Failure to meet development timelines, maintain solvency, or adhere to the terms of individual franchise agreements can result in the loss of development rights. It is crucial for franchisees to carefully review the Development Schedule and ensure they have the resources and capabilities to meet the agreed-upon milestones to avoid potential termination of the agreement.