Can Care Plus Medical Ucc require cash on delivery from a franchisee in default?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.4 Right to Discontinue Supplies Upon Default. While Franchisee is in default or breach of this Agreement, Care Plus Medical UCC may (i) require that Franchisee pay cash on delivery for products or services supplied by Care Plus Medical UCC, (ii) stop selling or providing any products and services to Franchisee, and/or (iii) request any third-party vendors to not sell or provide products or services to Franchisee.
No such action by Care Plus Medical UCC shall be a breach or constructive termination of this Agreement, change in competitive circumstances or similarly characterized, and Franchisee shall not be relieved of any obligations under this Agreement because of any such action.
Such rights of Care Plus Medical UCC are in addition to any other right or remedy available to Care Plus Medical UCC.
Source: Item 22 — CONTRACTS (FDD page 41)
What This Means (2024 FDD)
According to Care Plus Medical Ucc's 2024 Franchise Disclosure Document, if a franchisee is in default or breach of the franchise agreement, Care Plus Medical Ucc has the right to require the franchisee to pay cash on delivery for any products or services it supplies. This is one of several options available to Care Plus Medical Ucc in such a situation.
This provision means that if a Care Plus Medical Ucc franchisee fails to meet their obligations under the agreement, such as making payments on time or adhering to operational standards, Care Plus Medical Ucc can demand immediate payment for any further supplies or services provided. This shift to cash on delivery aims to mitigate Care Plus Medical Ucc's risk of incurring further losses from a non-compliant franchisee.
The FDD also states that Care Plus Medical Ucc's decision to require cash on delivery does not constitute a breach of the agreement, nor does it relieve the franchisee of their existing obligations. This action is in addition to any other legal remedies Care Plus Medical Ucc may pursue. This ensures that Care Plus Medical Ucc can take necessary steps to protect its interests without being accused of violating the franchise agreement itself.