Does a Carbones Pizzeria franchisee have the option to terminate the franchise agreement?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION]
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | ||
| a. Length of the Franchise term | Section 2 | 10 years from date of signing the Franchise Agreement |
| b. Renewal or extension of the term | Section 2 (See Note 2) | One 10 year term |
| c. Requirements for franchisee to renew or extend | Section 2 | Sign new agreement (which may contain materially different terms and conditions than your original Franchise Agreement), pay renewal fee, update your Restaurant to meet our then-current requirements for new restaurants |
| d. Termination by franchisee | None | Not applicable |
| e. Termination by franchisor without | None | Not applicable |
| cause | ||
| f. Termination by franchisor with cause | Section 15 | We may terminate only if you do one of the things described in Section 15 |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 24–26)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, franchisees do not have the option to terminate the franchise agreement. Item 17 provides a table summarizing the provisions related to termination, renewal, transfer, and dispute resolution.
The table outlines various aspects of the franchise agreement, including the length of the franchise term, renewal options, and the franchisor's termination rights. Specifically, it mentions the length of the franchise term is 10 years from the date of signing the Franchise Agreement, with one 10-year renewal term available. To renew, a franchisee must sign a new agreement, pay a renewal fee, and update their Restaurant to meet then-current requirements for new restaurants.
However, under the provision 'Termination by franchisee,' the summary states 'Not applicable,' indicating that the franchisee does not have a contractual right to terminate the agreement at will. The franchisor, on the other hand, can terminate the agreement with cause, as detailed in Section 15 of the franchise agreement. This cause can be either curable or non-curable defaults, such as nonpayment of fees or abandonment. This means a Carbones Pizzeria franchisee is bound to the terms of the agreement for its full duration unless the franchisor terminates it for cause.