Does Care Plus Medical UCC have an obligation to cure a franchisee's default under the agreement?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
14.2 Termination by Care Plus Medical UCC.
(a) Subject to 10-Day Cure Period. Care Plus Medical UCC may terminate this Agreement if Franchisee does not make any payment to Care Plus Medical UCC when due, or if Franchisee does not have sufficient funds in its account when Care Plus Medical UCC attempts an
electronic funds withdrawal, and Franchisee fails to cure such non-payment within 10 days after Care Plus Medical UCC gives notice to Franchisee of such breach.
- (b) Subject to 30-Day Cure Period.
If Franchisee breaches this Agreement in any manner not described in subsection (a) or (c), and Franchisee fails to cure such breach to Care Plus Medical UCC's satisfaction within 30 days after Care Plus Medical UCC gives notice to Franchisee of such breach, then Care Plus Medical UCC may terminate this Agreement.
- (c) Without Cure Period.
Care Plus Medical UCC may terminate this Agreement by giving notice to Franchisee, without opportunity to cure, if any of the following occur:
(i) Franchisee misrepresented or omitted material facts when applying to be a franchisee, or breaches any representation in this Agreement;
(ii) Franchisee knowingly submits any false report or knowingly provides any other false information to Care Plus Medical UCC;
(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;
(iv) Franchisee fails to open for business by the date specified on the Summary Page;
(v) Franchisee loses possession of the Location;
(vi) Franchisee or any Owner commits a material violation of Section 7.2 (compliance with laws) or Section 13.1 (confidentiality), violates Section 13.2 (non-compete) or Article 15 (transfer), or commits any other violation of this Agreement which by its nature cannot be cured;
(vii) Franchisee abandons or ceases operation of the Business for more than five consecutive days;
(viii) Franchisee or any Owner slanders or libels Care Plus Medical UCC or any of its employees, directors, or officers;
(ix) Franchisee refuses to cooperate with or permit any audit or inspection by Care Plus Medical UCC or its agents or contractors, or otherwise fails to comply with Section 10.5 or Section 11.2;
(x) the Business is operated in a manner which, in Care Plus Medical UCC's reasonable judgment, constitutes a significant danger to the health or safety of any person, and
Franchisee fails to cure such danger within 48 hours after becoming aware of the danger (due to notice from Care Plus Medical UCC or otherwise);
(xi) Franchisee has received two or more notices of default and Franchisee commits another breach of this Agreement, all in the same 12-month period;
Source: Item 22 — CONTRACTS (FDD page 41)
What This Means (2024 FDD)
According to the 2024 Care Plus Medical UCC Franchise Disclosure Document, Care Plus Medical UCC's obligation to allow a franchisee to cure a default depends on the nature of the breach. Care Plus Medical UCC may terminate the agreement if the franchisee fails to make payments when due or lacks sufficient funds for electronic withdrawals, and the franchisee does not cure this non-payment within 10 days after receiving notice from Care Plus Medical UCC.
If a franchisee breaches the agreement in any way not covered by the non-payment clause or the instances allowing termination without a cure period, Care Plus Medical UCC can terminate the agreement if the franchisee does not resolve the breach to Care Plus Medical UCC's satisfaction within 30 days after receiving notice.
However, there are specific instances where Care Plus Medical UCC can terminate the agreement without offering the franchisee an opportunity to cure the default. These include misrepresentation or omission of material facts in the franchise application, submission of false reports, appointment of a receiver or trustee, inability to pay debts, failure to open for business by the specified date, loss of location possession, certain violations of laws or confidentiality, abandonment of the business, slander or libel against Care Plus Medical UCC, refusal to cooperate with audits, operation of the business in a way that endangers health or safety without curing the danger within 48 hours, and repeated breaches within a 12-month period.