What constitutes 'good cause' for Caring Transitions to terminate a franchise and repurchase the business?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
Additional Disclosure: The following statements are added to Item 17.h. Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2025 FDD)
According to the 2025 Caring Transitions Franchise Disclosure Document, the definition of 'reasonable cause' for franchise termination is addressed specifically within the context of Virginia law. The FDD states that if any grounds for default or termination outlined in the franchise agreement do not meet the standard of 'reasonable cause' as defined by the Virginia Retail Franchising Act or other Virginia laws, then that particular provision may not be enforceable in Virginia. This addendum ensures that the Virginia Retail Franchising Act supersedes any inconsistent disclosures in the FDD.
This means that for franchisees operating in Virginia, Caring Transitions must have a legitimate and justifiable reason to terminate the franchise agreement. The reasons for termination must align with Virginia law, offering franchisees in Virginia a degree of protection against arbitrary or unfair termination.
Prospective franchisees should carefully review Item 17 of the FDD, which generally covers renewal, termination, transfer, and dispute resolution, in conjunction with the Virginia Retail Franchising Act to fully understand their rights and obligations. Franchisees should also seek legal counsel to ensure they understand the specific implications of Virginia law on their franchise agreement.