Under what circumstances can the Carbones Pizzeria franchisor terminate the franchise agreement with cause?
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 franchisor can terminate the franchise agreement with cause if the franchisee commits certain defaults as outlined in Section 15 of the Franchise Agreement. These defaults are categorized into curable and non-curable defaults.
Curable defaults, detailed in Sections 15(e) through 15(f), include issues such as nonpayment of fees, sanitation problems, and failure to submit required reports. In these instances, a Carbones Pizzeria franchisee has 30 days to rectify the default. If the franchisee successfully addresses the issue within this timeframe, the franchisor cannot terminate the agreement.
Non-curable defaults, as specified in Sections 15(a) through 15(d), are more severe and do not offer an opportunity for the franchisee to correct the issue. These 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. If a franchisee commits a non-curable default, Carbones Pizzeria has grounds to terminate the franchise agreement immediately.
It is important for a prospective Carbones Pizzeria franchisee to carefully review Section 15 of the Franchise Agreement to fully understand the specific actions or omissions that could lead to termination with cause. Understanding these provisions is crucial for maintaining a successful and compliant franchise operation.