Does the cure period for failing to pay fees apply to fees owed to Casiola affiliates?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
| v. Choice of forum | 18.G. | All mediation, arbitration and, if applicable, litigation proceedings | |---|---|---| | | | must be conducted in, or closest to, State court of general | | | | jurisdiction that is within or closest to Orange County, Florida or, | | | | if appropriate, the United States District Court nearest to our | | | | corporate headquarters at the time such action is filed. This | | | | provision is subject to applicable state law. | | w. Choice of law | 18.F. | Florida law will govern. However, this provision is subject to state | | | | law and as otherwise disclosed in Exhibit I to this Disclosure | | | | Document. |
| g. | "Cause" defined-curable defaults | 16.A.(3), 16.A.(4) | You have 10 days to cure a default where you fail to pay any fees and/or obligations due to us and/or to an affiliate of ours or if you fail to pay a supplier without, as determined by us, a legal justification, provided that the foregoing defaults were not intentionally and knowingly in violation of the Franchise Agreement. You will have 30 days to cure a default where you fail to: timely lease a location that we approve for your Casiola Business; timely develop and open your Casiola Business; operate your Casiola Business in accordance with the specifications, standards, and requirements set forth in our Manuals; develop or operate your Casiola Business in compliance with all federal, state, and local laws, rules, and regulations, unless, such violation poses a threat to public health or safety; maintain insurance coverage that we require; comply with our standards, systems or specifications as we may designate or as otherwise designated in the operations manual; fail to operate your Casiola Business in conformity with our System or otherwise violate the Franchise Agreement, except as to events of default that are not curable.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 35–39)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, the cure period for failing to pay fees extends to fees owed to Casiola's affiliates. Specifically, if a franchisee fails to pay any fees or obligations due to Casiola or an affiliate, the franchisee has 10 days to cure the default, provided the default was not intentionally and knowingly in violation of the Franchise Agreement. This means that the franchisee's responsibility to pay extends not only to the franchisor, Casiola, but also to any entities affiliated with Casiola.
This requirement is important for prospective franchisees to understand because it broadens the scope of financial obligations that could lead to a default under the Franchise Agreement. Franchisees must ensure they are aware of all potential fees and obligations, including those owed to Casiola's affiliates, and that they have systems in place to manage and pay these obligations in a timely manner. Failure to do so could result in the termination of the franchise agreement.
The FDD also outlines other curable defaults, which include failing to timely lease a location, develop and open the Casiola business, operate the business according to Casiola's standards, comply with laws, maintain insurance, or otherwise violate the Franchise Agreement. These defaults have a 30-day cure period. However, the 10-day cure period for non-payment of fees to Casiola or its affiliates highlights the importance Casiola places on timely payments. Franchisees should be diligent in managing their financial obligations to avoid potential defaults and maintain a good standing with the franchisor and its affiliates.