If a Carbones Pizzeria franchisee is convicted of an offense, does that automatically terminate the franchise agreement?
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.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, a franchisee's conviction of an offense can lead to the termination of the franchise agreement. Specifically, if a Carbones Pizzeria franchisee, or a principal officer, director, principal shareholder, or partner of the franchisee, is convicted of an offense, or enters a plea of guilty or no contest in a court of competent jurisdiction, Carbones Pizzeria has the right to terminate the franchise agreement.
Termination due to a conviction, guilty plea, or no contest plea becomes effective immediately upon the franchisee receiving written notice from Carbones Pizzeria. This means that upon such a conviction or plea, Carbones Pizzeria can promptly terminate the agreement, provided they give written notice.
This clause highlights the importance of maintaining a clean legal record for both the franchisee and its key personnel. A conviction, even if seemingly unrelated to the operation of the Carbones Pizzeria franchise, could trigger immediate termination of the agreement, resulting in a loss of the franchise and its associated investment.