What is the exception to the 30-day lien rule for Care Plus Medical Ucc franchisees?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
- (iii) a receiver or trustee for the Business or all or substantially all of Franchisee's property is appointed by any court, or Franchisee makes a general assignment for the benefit of Franchisee's creditors, or Franchisee is unable to pay its debts as they become due, or a levy or execution is made against the Business, or an attachment or lien remains on the Business for 30 days unless the attachment or lien is being duly contested in good faith by Franchisee, or a petition in bankruptcy is filed by Franchisee, or such a petition is filed against or consented to by Franchisee and the petition is not dismissed within 45 days, or Franchisee is adjudicated as bankrupt;
Source: Item 22 — CONTRACTS (FDD page 41)
What This Means (2024 FDD)
According to the 2024 FDD, a Care Plus Medical Ucc franchise can be terminated if an attachment or lien remains on the business for 30 days. However, there is an exception to this rule.
The exception is that if the franchisee is actively contesting the attachment or lien in good faith, the 30-day period does not apply. This means that Care Plus Medical Ucc cannot terminate the franchise agreement solely based on the existence of a lien if the franchisee is genuinely disputing it through appropriate legal channels.
This provision protects the franchisee from immediate termination due to circumstances beyond their immediate control, provided they are actively and honestly challenging the lien. It is important for a prospective Care Plus Medical Ucc franchisee to understand this exception, as it provides a safeguard against potential termination in the event of a dispute leading to a lien on the business.