What constitutes a material breach of the Carbones Pizzeria franchise agreement that could lead to termination?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may terminate this Agreement on the happening of any one of the following events:
- a. Franchisee voluntary abandons the Franchise relationship, the Restaurant or its business;
- b. Conviction of Franchisee (or of a principal officer, director, principal shareholder, or partner of Franchisee) or entry by any of the same of a plea of guilty or of no contest in a court of competent jurisdiction, of an offense;
- c. Any action of Franchisee which substantially impairs the good will associated with Franchisor's Names and Marks if Franchisee has not terminated such action within twenty-four (24) hours after receipt of written notice demanding that Franchisee terminate such action and cure the default caused thereby;
- d. Bankruptcy or insolvency of Franchisee or an assignment for the benefit of Franchisee's creditors;
- e. Material breach of the terms and conditions of this Agreement other than a failure to make payments; or
- f. Failure of Franchisee to make payment to Franchisor of any Royalty, Advertising Fees or other amounts (including interest) due to Franchisor pursuant to the terms of this Agreement.
Termination for the events described in items (a) through (d) shall occur immediately upon receipt of written notice. Termination for the events described in item I shall occur if Franchisee fails to correct the breach within thirty (30) days after notice from Franchisor. Termination for the events described in item (f) shall occur if Franchisee fails to cure such payment default within ten (10) days of notice from Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, Carbones Pizzeria may terminate the franchise agreement if a franchisee commits a material breach of the agreement's terms and conditions. This excludes failure to make payments, which is addressed separately. Additionally, Carbones Pizzeria can terminate the agreement if the franchisee voluntarily abandons the franchise, the restaurant, or its business.
Other events that could lead to termination include the conviction of the franchisee (or a principal officer, director, principal shareholder, or partner) of an offense, or if they enter a plea of guilty or no contest in court. Carbones Pizzeria may also terminate the agreement if the franchisee takes any action that substantially impairs the goodwill associated with Carbones Pizzeria's Names and Marks, and the franchisee does not stop such action within 24 hours of receiving written notice.
Furthermore, the agreement can be terminated if the franchisee declares bankruptcy or becomes insolvent, or if they make an assignment for the benefit of their creditors. Termination for abandonment, conviction, bankruptcy, or assignment occurs immediately upon written notice. However, if the termination is due to a material breach (other than payment failure), the franchisee has 30 days after notice from Carbones Pizzeria to correct the breach.