Can Card My Yard terminate the franchise agreement without cause?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
| d. Termination by franchisee | Not Applicable | Not Applicable (your termination rights are subject to state law) |
|---|---|---|
| e. Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. Termination by franchisor with cause | Section XVIII. | We may terminate on your default. |
| g. "Cause" defined – curable defaults | Section XVIII.C. | For any default except those specified as non-curable you have 30 days to cure (5 days for failure to submit a required report or pay monies; 24 hours for misuse of the Marks; 7 days if you fail to obtain the required insurance coverages; and 10 days if you fail to comply with the non-competition covenants). |
| h. "Cause" defined – non-curable defaults | Sections XVIII.A. and XVIII.B. | Insolvency; general assignment for benefit of creditors; bankruptcy; receivership; final judgment remains unsatisfied for 30 days or more; dissolution; execution of levy or sale after levy; foreclosure proceedings not dismissed within 30 days; operation of Card My Yard business at location that we have not accepted;; failure to begin business within the required time period; abandonment or forfeiture of right to do business; conviction of certain crimes; threat to public health or safety; unauthorized transfer; failure to comply with certain confidentiality covenants; false records or submission of false reports; breach of any covenants or false representations; failure to comply with quality assurance program; default under any other franchise agreement and failure to cure; repeated defaults whether or not cured; assets, property or interests "blocked" under any terrorism laws or regulations or other violation of such laws or regulations. |
Source: Item 17 — RENEWAL TERMINATION TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 51–55)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, Card My Yard cannot terminate the franchise agreement without cause. The table within Item 17 outlines various termination conditions. Specifically, it states that termination by the franchisor without cause is 'Not Applicable.' This means that Card My Yard must have a valid reason or 'cause' to terminate the franchise agreement.
However, Card My Yard can terminate the franchise agreement with cause, as detailed in Section XVIII of the FDD. Cause for termination includes franchisee default. The FDD further defines 'cause' as both curable and non-curable defaults. Curable defaults allow the franchisee a period to correct the issue, such as 30 days for most defaults, 5 days for failure to submit a required report or pay monies, 24 hours for misuse of the Marks, 7 days for failure to obtain required insurance coverages, and 10 days for failure to comply with non-competition covenants.
Non-curable defaults, as outlined in Sections XVIII.A. and XVIII.B., include more severe issues such as insolvency, bankruptcy, a final judgment remaining unsatisfied for 30 days or more, or failure to begin business within the required time period. Other non-curable defaults include conviction of certain crimes, threat to public health or safety, unauthorized transfer, failure to comply with certain confidentiality covenants, false records or submission of false reports, breach of any covenants or false representations, failure to comply with quality assurance program, default under any other franchise agreement and failure to cure, repeated defaults whether or not cured, and assets, property or interests "blocked" under any terrorism laws or regulations or other violation of such laws or regulations. These defaults, if not corrected within the specified time frame (if curable), can lead to termination of the franchise agreement by Card My Yard.