Under what conditions related to bankruptcy or insolvency can the Carbones Pizzeria franchise agreement be terminated?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may terminate this Agreement on the happening of any one of the following events:
- d. Bankruptcy or insolvency of Franchisee or an assignment for the benefit of Franchisee's creditors;
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 Carbones Pizzeria's 2025 Franchise Disclosure Document, the franchise agreement can be terminated if the franchisee declares bankruptcy or becomes insolvent, or if the franchisee makes an assignment for the benefit of the franchisee's creditors.
If any of these events occur, Carbones Pizzeria can terminate the franchise agreement immediately upon written notice to the franchisee. This means that the franchisee's rights to operate under the Carbones Pizzeria brand will cease as soon as they receive the notice.
Bankruptcy and insolvency are significant financial events that can have severe consequences for a franchise agreement. This clause protects Carbones Pizzeria's interests by allowing them to terminate the agreement quickly if the franchisee's financial situation becomes unstable. This is a fairly standard clause in most franchise agreements.