What is the cure period for a default under the Casiola Franchise Agreement?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
- C.
A provision that permits us to terminate a franchise before the expiration of this term except for good cause.
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 cure period for a default varies depending on the nature of the default. Generally, Casiola franchisees are given a reasonable opportunity to cure a failure to comply with the Franchise Agreement, but this period need not be more than 30 days. This is particularly relevant in Michigan, where state law voids any franchise agreement provision that allows termination before the term's expiration without good cause and a reasonable cure period. However, there are circumstances where Casiola can terminate the agreement without providing any opportunity to cure.
Casiola can terminate the Franchise Agreement with written notice and without a cure period if a franchisee engages in actions that constitute a default on three or more occasions, regardless of whether those defaults were previously addressed or cured. Additionally, if a franchisee intentionally breaches the agreement with the intent of causing harm to Casiola, the system, other franchisees, or customers, Casiola can terminate the agreement immediately.
Furthermore, if a franchisee intends to initiate legal action against Casiola, the franchisee must provide Casiola with a "30 Day Cure Notice," granting Casiola 30 days from the notice's receipt to address the issue. This 30-day cure period is a strict condition that must be met before the franchisee can commence any legal proceedings against Casiola. This requirement could impact a franchisee's ability to seek timely legal remedies.
Prospective Casiola franchisees should be aware of these varying cure periods and the specific conditions under which Casiola can terminate the agreement without any opportunity to cure. Understanding these provisions is crucial for assessing the risks and obligations associated with the franchise agreement.