Under what conditions can Carbones Pizzeria 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. |
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 franchise agreement can be terminated with cause if the franchisee engages in specific actions detailed in Section 15 of the Franchise Agreement. The FDD outlines two categories of defaults that can lead to termination: curable and non-curable defaults.
Curable defaults, as described 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 correct the default. If the franchisee rectifies the issue within this timeframe, termination is avoided. This provides an opportunity for franchisees to address and resolve certain operational or financial shortcomings.
Non-curable defaults, detailed 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. Because these defaults are considered inherently damaging to the franchise system, they can lead to immediate termination of the franchise agreement by Carbones Pizzeria.