For Card My Yard, what is the consequence if the franchisee provides untruthful answers in the questionnaire?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
(9) If you knowingly maintain false books or records, or submit any false reports to us;
(8) If you fail to comply with any other requirement imposed by this Agreement, or fail to carry out the terms of this Agreement in good faith and fail to cure such default within thirty (30) days following notice from us.
D.
Our Right to Provide Interim Management.
If we have given you notice that you are in default, then we may (but are not obligated to) assume interim management of the Card My Yard business during the pendency of any cure period or in lieu of immediately terminating this Agreement.
If we elect to assume interim management of the Card My Yard business (i) our election will not relieve you of your obligations under this Agreement; (ii) we will not be liable for any debts, losses, costs or expenses incurred in the operation of the Card My Yard business during any such interim management period; (iii) we will have the right to charge a reasonable fee for our management services; and (iv) you agree to, and hereby do, indemnify and hold us harmless against any and all claims, demands, judgments, fines, losses, liabilities, costs, amounts paid in settlement and reasonable expenses (including, but not limited to attorneys' fees) incurred in connection with our interim management of the Card My Yard business, other than those arising solely from our gross negligence or willful misconduct.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, if a franchisee knowingly maintains false books or records, or submits any false reports to Card My Yard, it constitutes a breach of the franchise agreement.
Item 23 outlines various scenarios that can lead to default, and specifically mentions the submission of false information as a cause for default. If Card My Yard provides notice of the default, the franchisee has thirty days to correct the issue. Failure to rectify the situation within this period allows Card My Yard to take further action, including assuming interim management of the business or terminating the agreement.
If Card My Yard opts for interim management, the franchisee remains responsible for their obligations under the agreement. Card My Yard is not liable for any debts, losses, or expenses incurred during this period and can charge a reasonable fee for their management services. The franchisee must also indemnify Card My Yard against any claims or liabilities arising from the interim management, except in cases of gross negligence or willful misconduct by Card My Yard.
Ultimately, providing untruthful answers or submitting false reports can have severe consequences for a Card My Yard franchisee, potentially leading to the loss of their franchise and associated business. Franchisees should ensure the accuracy and integrity of all information provided to the franchisor to avoid such outcomes.