Can Casa De Corazon suspend services to a franchisee who is in default?
Casa_De_Corazon Franchise · 2025 FDDAnswer from 2025 FDD Document
20.) PRE-TERMINATION OPTIONS OF FRANCHISOR
- (a) Rights in Addition to Termination Prior to the termination of this Agreement, if Franchisee fails to pay any amounts owed to Franchisor or its affiliates or fails to comply with any term of this Agreement or any other agreement between Franchisor and Franchisee or an affiliate of Franchisor and Franchisee, then in addition to any right Franchisor may have to terminate this Agreement or to bring a claim for damages, Franchisor shall have the option to:
- (i) Remove any listing of the Franchised Business from any Franchisor Identified Social Media Presence;
- (ii) Prohibit Franchisee from attending any meetings or seminars held or sponsored by Franchisor or taking place on the premises of Franchisor;
- (iii) Suspend the provision of any or all of the services provided by Franchisor to Franchisee hereunder; and
- (iv) Require Franchisee to participate in a peer group made up of other franchisees for such time period as Franchisor may require.
- (b) Continuation of Franchisor Options Franchisor's actions, as outlined in this Section 20, may continue until Franchisee has brought its accounts current, cured any default, and complied with Franchisor's requirements, and Franchisor has acknowledged the same in writing. The taking of any of the actions permitted in this Section shall not suspend or release Franchisee from any obligation that would otherwise be owed to Franchisor or its affiliates under the terms of this Agreement or otherwise nor shall Franchisee assert that the taking of any such actions shall act as an actual or constructive termination of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2025 FDD)
According to Casa De Corazon's 2025 Franchise Disclosure Document, Casa De Corazon has the option to suspend services to a franchisee who is in default. Specifically, prior to terminating the Franchise Agreement, Casa De Corazon can exercise several options if the franchisee fails to pay amounts owed or comply with the terms of the agreement.
As stated in the FDD, Casa De Corazon can remove any listing of the franchised business from any Franchisor Identified Social Media Presence. Casa De Corazon can also prohibit the franchisee from attending any meetings or seminars held or sponsored by Casa De Corazon or taking place on the premises of Casa De Corazon.
Additionally, Casa De Corazon can suspend the provision of any or all of the services provided to the franchisee. Casa De Corazon can also require the franchisee to participate in a peer group made up of other franchisees for such time period as Casa De Corazon may require. These actions may continue until the franchisee brings its accounts current, cures any default, complies with Casa De Corazon's requirements, and Casa De Corazon acknowledges the same in writing.