Which sections of the Carbones Pizzeria Franchise Agreement define 'cause' for termination, specifically non-curable defaults?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 |
| g. "Cause" defined – curable defaults | Sections 15(e) through 15(f) | You have 30 days to cure nonpayment of fees, sanitation problems, non submission of reports and any other default not listed in Section 15 |
| h. "Cause" defined – non-curable defaults | Sections 15(a) through 15(d) | Non curable defaults include abandonment, trademark misuse and conviction of an offense directly related to the Restaurant business |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 24–26)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the sections of the Franchise Agreement that define 'cause' for termination due to non-curable defaults are outlined in Section 15(a) through 15(d). These sections specify actions or events that are considered so severe that they cannot be remedied by the franchisee, leading to immediate termination of the agreement.
Specifically, the FDD indicates that non-curable defaults include actions such as abandonment of the franchise, misuse of Carbones Pizzeria's trademarks, and conviction of an offense directly related to the restaurant business. These types of defaults are considered critical breaches of the Franchise Agreement, justifying immediate termination by Carbones Pizzeria.
Prospective franchisees should carefully review Section 15(a) through 15(d) of the Franchise Agreement to fully understand what constitutes a non-curable default. Understanding these terms is crucial, as any of these actions could lead to the termination of the franchise and loss of their investment. It is also advisable to seek legal counsel to clarify any ambiguities or concerns regarding these termination clauses before signing the agreement.