Under what conditions can the Carbones Pizzeria franchise agreement be terminated before the end of the initial term?
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 franchise agreement can be terminated by the Franchisor prior to the end of its ten-year initial term under certain conditions. These conditions include if the franchisee voluntarily abandons the franchise, restaurant, or its business. Termination can also occur if the franchisee, or a principal officer, director, shareholder, or partner, is convicted of an offense, or enters a guilty plea or plea of no contest in court.
Another cause for termination is any action by the franchisee that substantially impairs the goodwill associated with Carbones Pizzeria's Names and Marks, if the franchisee does not stop such action within 24 hours of receiving written notice. The agreement can also be terminated if the franchisee declares bankruptcy or insolvency, or makes an assignment for the benefit of creditors. A material breach of the franchise agreement's terms, other than a failure to make payments, can also lead to termination if the franchisee does not correct the breach within 30 days of notice from Carbones Pizzeria.
Finally, failure to make payments to Carbones Pizzeria of any Royalty, Advertising Fees or other amounts due, including interest, as per the agreement's terms, can result in termination if the franchisee does not cure the payment default within ten days of notice from the franchisor. It is important to note the timing of the termination depends on the event. For abandonment, conviction, bankruptcy, or assignment, termination occurs immediately upon written notice. For other material breaches, the franchisee has 30 days to correct the issue after notice. For payment defaults, the franchisee has only 10 days to cure the default after notice.