What is the 'Holdover Notice' in the context of the Care Plus Medical Ucc franchise agreement?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.10 Holdover. If Franchisee continues operating the Business after the expiration of the term without a renewal agreement or successor franchise agreement executed by the parties in accordance with Section 3.2, then at any time (regardless of any course of dealing by the parties), Care Plus Medical UCC may by giving written notice to Franchisee (the "Holdover Notice") either (i) require Franchisee to cease operating the Business and comply with all post-closing obligations effective immediately upon giving notice or effective on such other date as Care Plus Medical
UCC specifies, or (ii) bind Franchisee to a renewal term of 5 years, and deem Franchisee and its Owners to have made the general release of liability described in Section 3.2(vi).
Source: Item 22 — CONTRACTS (FDD page 41)
What This Means (2024 FDD)
According to Care Plus Medical Ucc's 2024 Franchise Disclosure Document, the Holdover Notice comes into play if a franchisee continues to operate the business after the franchise term expires, without a renewal or successor agreement in place. In this situation, Care Plus Medical Ucc has the right to issue a written Holdover Notice to the franchisee.
This Holdover Notice gives Care Plus Medical Ucc two options. First, Care Plus Medical Ucc can demand that the franchisee immediately cease operating the business and comply with all post-termination obligations. Alternatively, Care Plus Medical Ucc can bind the franchisee to a renewal term of 5 years.
If Care Plus Medical Ucc chooses to bind the franchisee to a renewal term, the franchisee and its owners are then considered to have made a general release of liability as described in Section 3.2(vi) of the franchise agreement. This means the franchisee gives up certain rights to sue Care Plus Medical Ucc. This clause is important for prospective franchisees to understand, as it outlines the potential consequences of continuing to operate the franchise after the agreement's expiration without a formal renewal.