Can a Casiola franchisee cure a default if an involuntary petition in bankruptcy is filed against them?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
- (d) An involuntary petition in bankruptcy is filed against Franchisee and Franchisee fails to have the involuntary petition discharged within 35 days of the petition filing, and/or Franchisee seeks, consents to, or acquiesces in, the appointment of any trustee, receiver, conservator, custodian or liquidator for Franchisee's business or any assets of Franchisee;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, a franchisee is considered in default if an involuntary petition in bankruptcy is filed against them. The franchisee then has a limited time to resolve the situation.
Specifically, the FDD states that if an involuntary petition in bankruptcy is filed against the Casiola franchisee, they must have the petition discharged within 35 days of the filing. Failure to do so constitutes a default under the franchise agreement.
This means that a Casiola franchisee facing an involuntary bankruptcy petition has a little over a month to get the petition dismissed or otherwise resolved to avoid being in default of their franchise agreement. This is a relatively short window and highlights the importance of maintaining sound financial health as a franchisee. If the franchisee fails to address the bankruptcy petition within the given timeframe, Casiola has grounds to take action, potentially including termination of the franchise agreement.