What constitutes insolvency that would lead to automatic termination of the Card My Yard franchise agreement?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
You will be deemed to be in default under this Agreement, and all rights granted herein shall automatically terminate without notice to you, if you become insolvent or make a general assignment for the benefit of creditors; or if you file a voluntary petition under any section or chapter of federal bankruptcy law or under any similar law or statute of the United States or any state thereof, or admit in writing your inability to pay your debts when due; or if you are adjudicated as bankrupt or insolvent in proceedings filed against you under any section or chapter of federal bankruptcy laws or under any similar law or statute of the United States or any state; or if a bill in equity or other proceeding for the appointment of a receiver or other custodian for your business or assets is filed and consented to by you; or if a receiver or other custodian (permanent or temporary) of your assets or property, or any part thereof, is appointed by any court of competent jurisdiction; or if proceedings for a composition with creditors under any state or federal law are instituted by or against you; or if a final judgment against you remains unsatisfied or of record for thirty (30) days or longer (unless supersedeas bond is filed); or if you are dissolved; or if execution is levied against your business or property; or if judicial, non-judicial or administrative proceedings to foreclose any lien or mortgage against the Card My Yard business premises or equipment is instituted against you and not dismissed within thirty (30) days; or if the real or personal property of your Card My Yard business shall be sold after levy thereupon by any sheriff, marshal or constable or is otherwise sold by means of a foreclosure sale or a public or private auction or sale conducted in accordance with applicable law.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, certain insolvency-related events will trigger an automatic termination of the franchise agreement. This means that upon the occurrence of any of these events, the agreement ends immediately without Card My Yard needing to provide any prior notice to the franchisee.
Specifically, the franchise agreement will automatically terminate if the franchisee becomes insolvent, makes a general assignment for the benefit of creditors, or files a voluntary petition under any section of federal bankruptcy law. Similarly, admitting in writing the inability to pay debts when due, being adjudicated bankrupt or insolvent in proceedings filed against the franchisee, consenting to the appointment of a receiver for the business, or having a receiver appointed by a court also constitute grounds for automatic termination. Furthermore, if proceedings for a composition with creditors are instituted by or against the franchisee, this will also lead to automatic termination.
Additionally, the Card My Yard franchise agreement will be automatically terminated if a final judgment against the franchisee remains unsatisfied for 30 days or longer (unless a supersedeas bond is filed), if the franchisee is dissolved, or if execution is levied against the business or property. The agreement will also automatically terminate if judicial, non-judicial, or administrative proceedings to foreclose any lien or mortgage against the Card My Yard business premises or equipment are instituted against the franchisee and not dismissed within 30 days. Finally, the sale of the real or personal property of the Card My Yard business after levy by a sheriff, marshal, or constable, or through foreclosure or auction, will also result in automatic termination.