Does Care Plus Medical UCC have to actually terminate a franchise agreement for the MUDA to be terminated?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
franchise agreement executed pursuant to this MUDA for each such Care Plus Medical business.
3. Development Area. Franchisee shall locate each Care Plus Medical business it develops under this MUDA within the following area: _____________________________ _____________ (the "Development Area"). Franchisee shall have exclusive rights to develop, open or operate Care Plus Medical businesses in the Development Area while this agreement is in effect.
- 4. Default and Termination. Care Plus Medical UCC may terminate this MUDA by giving notice to Franchisee, without opportunity to cure, if any of the following occur:
- (i) Franchisee fails to satisfy the development schedule;
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to the 2024 Care Plus Medical UCC Franchise Disclosure Document, Care Plus Medical UCC does not necessarily have to terminate a franchise agreement for the Multi-Unit Development Agreement (MUDA) to be terminated. The MUDA can be terminated if Care Plus Medical UCC has the right to terminate any franchise agreement with the franchisee due to default, regardless of whether Care Plus Medical UCC actually terminates the franchise agreement.
This provision in the MUDA means that even if Care Plus Medical UCC chooses not to fully terminate a franchise agreement, the MUDA can still be terminated if the grounds for termination exist. This could occur if Care Plus Medical UCC identifies a breach of contract or other default that would allow them to terminate the franchise agreement, but they opt to work with the franchisee to resolve the issue instead. However, the existence of that right is sufficient for them to terminate the MUDA.
For a prospective franchisee, this clause highlights the importance of maintaining compliance with all franchise agreements. Any potential default, even if seemingly minor or if the franchisor initially appears lenient, could trigger the termination of the MUDA. This could jeopardize the franchisee's ability to develop additional Care Plus Medical UCC businesses within the designated development area.
It is also important to note that the franchisee can terminate the MUDA at any time, according to the FDD. However, if Care Plus Medical UCC terminates the MUDA for the franchisee's default, the franchisee will not be liable to Care Plus Medical UCC for lost future revenues or profits from the unopened Care Plus Medical businesses.