What is the cure period for defaults that can lead to automatic termination of the Casiola franchise agreement?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
- (k) A cause of action or lawsuit to foreclose any lien against equipment used in the operation of the Franchised Business and not dismissed within 60 days after the summons is served on Franchisee;
- (l) Real or personal property of Franchisee used in the operation of the Franchised Business is sold after levy thereupon by any sheriff, marshal or other law enforcement officer; and/or
- (m) Upon termination by Franchisor pursuant to Article 16.A.(2), Article 16.A.(3), or Article 16.A.(4) of this Agreement.
- (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;
- (c) Franchisee intentionally, knowingly, with prior notice, and/or through negligence, at any time, develops, manages, maintains, and/or operates the Franchised Business in violation of federal, state, and/or local laws, rules, regulations, ordinances, permits, codes and/or conduct resulting in a foreseeable, immediate and/or imminent threat to the health and/or safety of any third party including customers, employees, and/or the public at large;
- (d) Franchisee abandons, surrenders and/or fails to continuously and actively operate the Franchised Business, unless prevented from doing so by casualty that is the subject of Article 7.C. of this Agreement and that is cured/remedied in accordance with Article 7.C.;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, certain defaults allow Casiola to terminate the franchise agreement with written notice and without any opportunity for the franchisee to cure the default. These defaults include instances where the franchisee repeatedly engages in actions that constitute a default under Articles 16.A.(3) and/or 16.A.(4) of the agreement, regardless of whether the franchisee received a notice of default or had previously cured such defaults. Additionally, if a franchisee intentionally breaches the franchise agreement with the intent of causing harm to Casiola, the system, other franchisees, or customers, Casiola can terminate the agreement immediately.
However, other types of defaults allow for a 30-day cure period. Casiola will provide written notice, and the franchisee has 30 calendar days to resolve the issue to Casiola's satisfaction. If the franchisee fails to cure the default within this period, Casiola can terminate the agreement.
It's also important to note that in Michigan, the franchise agreement cannot be terminated before the expiration of its term except for good cause, and the franchisee must be given written notice of the failure and a reasonable opportunity, which need not be more than 30 days, to cure the failure. In Washington, the Washington Franchise Investment Protection Act may supersede the franchise agreement in areas of termination and renewal.