Under what circumstances can the Carbones Pizzeria franchise agreement be terminated by the Franchisor?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
15. Termination.
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, the franchisor can terminate the franchise agreement under several specific circumstances. These include if the franchisee voluntarily abandons the franchise, the restaurant, or its business operations. Additionally, a conviction (or a guilty/no contest plea) of the franchisee or a principal officer/director/shareholder for an offense can lead to termination. Any action by the franchisee that significantly damages the goodwill associated with Carbones Pizzeria's names and marks, if not corrected within 24 hours of written notice, is also grounds for termination.
Further reasons for termination involve financial and legal issues. If the franchisee declares bankruptcy, becomes insolvent, or makes an assignment for the benefit of creditors, Carbones Pizzeria can terminate the agreement. A material breach of the franchise agreement's terms and conditions (excluding payment failures) can also result in termination, provided the franchisee does not correct the breach within 30 days of receiving notice. Finally, failure to make required payments to Carbones Pizzeria, such as royalties, advertising fees, or other amounts due, will lead to termination if the franchisee does not cure the payment default within ten days of notice.
These termination conditions are fairly standard in the franchise industry, as they protect the franchisor's brand, reputation, and financial interests. It is important for a prospective Carbones Pizzeria franchisee to fully understand these conditions before entering into a franchise agreement. The specific notice periods and cure periods are also important to note, as they dictate the franchisee's opportunity to rectify any issues before termination occurs. Franchisees should ensure they have systems in place to manage payments and maintain compliance with the franchise agreement to avoid potential termination.