Are there any defaults under the Card My Yard franchise agreement that are not susceptible to cure?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
XVIII. TERMINATION
- A.
Automatic Termination.
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.
- B.
Termination on Notice; No Cure.
You will be deemed to be in material default and we may, at our option, terminate this Agreement and all rights granted hereunder, without affording you any opportunity to cure the default, effective immediately upon notice to you, upon the occurrence of any of the following events:
- (1) If you operate the Card My Yard business or sell any products or services authorized by us at any location other than the Franchise Location without our prior written consent;
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, certain defaults under the franchise agreement will result in automatic termination without an opportunity to cure. These include situations where the franchisee becomes insolvent, makes an assignment for the benefit of creditors, files for bankruptcy, or admits their inability to pay debts. Similarly, the agreement terminates automatically if a receiver is appointed for the franchisee's business, proceedings for composition with creditors are instituted, a final judgment remains unsatisfied for 30 days, the franchisee is dissolved, or execution is levied against the business. Furthermore, the agreement terminates automatically if proceedings to foreclose a lien or mortgage are instituted and not dismissed within 30 days, or if the business's property is sold after levy by a sheriff or through foreclosure.
Card My Yard can also terminate the agreement immediately without opportunity to cure if the franchisee operates the business or sells unauthorized products/services at an unapproved location.
These 'no cure' termination clauses are relatively standard in franchising, designed to protect the Card My Yard brand and system from severe operational or financial distress caused by a franchisee. Prospective franchisees should carefully consider these clauses and understand that certain actions can lead to immediate termination of their franchise agreement.