What is the cure period allowed for a Casiola franchisee to rectify a default after receiving written notice from the franchisor?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
Good cause shall include your failure to comply with any lawful provision of the Franchise Agreement and to cure the failure after being given written notice of the failure and a reasonable opportunity, which in no event need be more than 30 days, to cure the failure.
- (2) Defaults and Automatic Termination upon Written Notice without Cure Period Franchisee shall be in default of this Agreement, and, this Agreement may be terminated by Franchisor, at Franchisor's sole discretion, upon written notice from Franchisor to Franchisee and without providing Franchisee any opportunity to cure, upon the occurrence of any one or more of the following actions,
inactions, omissions, events, and/or circumstances, with such termination effective on the date of Franchisor's notice:
(a) Franchisee, on three or more instances and/or occasions, engages, commits, and/or suffers an action, inaction, omission, event, and/or circumstance that constitutes or qualifies as a default under Articles 16.A.(3) and/or 16.A.(4) of this Agreement, irrespective of whether or not such action, inaction, omission, event, and/or circumstance is the subject of a notice of default from Franchisor to Franchisee pursuant to Articles 16.A.(3) and/or 16.A.(4) of this Agreement and irrespective of whether or not such default was timely cured and irrespective of whether or not Franchisee paid any penalties or additional fees to Franchisor;
(b) Franchisee, intentionally and knowingly, refuses to comply with and/or breaches any term, condition, provision, and/or requirement of this Agreement with the intent of causing harm to Franchisor, the System, other System franchisee and/or customers of the Franchised Business;
Franchisee shall give Franchisor advance written notice of Franchisee's intent to commence or otherwise institute any legal action or proceeding against Franchisor, specifying the basis for such proposed action, and Franchisee shall grant Franchisor 30 days from receipt of said notice to cure the alleged act upon which such legal action is to be based (hereinafter, the "30 Day Cure Notice"). Franchisee agrees that the 30 Day Cure Notice is a strict condition precedent to Franchisee commencing, or otherwise instituting, legal action or proceeding against Franchisor for any reason whatsoever.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, the standard cure period for a franchisee to rectify a default is not explicitly defined in most cases. However, the Michigan FDD Amendment states that if Casiola seeks to terminate a franchise before the expiration of its term, it must provide written notice of the failure and a reasonable opportunity to cure, which in no event needs to be more than 30 days.
There are circumstances where Casiola can terminate the franchise agreement immediately without providing an opportunity to cure. This can occur if a franchisee engages in actions that constitute a default under Articles 16.A.(3) and/or 16.A.(4) of the agreement on three or more instances, regardless of whether the defaults were previously noticed or cured. Immediate termination without a cure period is also possible if the franchisee intentionally and knowingly breaches the agreement with the intent of causing harm to Casiola, the system, other franchisees, or customers.
Furthermore, the franchisee is required to provide Casiola with a "30 Day Cure Notice" before initiating any legal action against Casiola. This notice allows Casiola 30 days to address the issue that would be the basis for the legal action. This 30-day cure period is a condition precedent to the franchisee commencing legal proceedings against Casiola.