What happens if a Casiola franchisee does not comply with the terms of Article 17 after termination?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
17.C. CONTINUING OBLIGATIONS
All obligations under this Agreement that expressly, or by their nature, survive, or are intended to survive, the expiration, termination, or Transfer of this Agreement shall continue in full force and effect subsequent to, and notwithstanding, this Agreement's termination, expiration, or Transfer until such obligations are satisfied in full or, by the nature and/or terms, such obligation(s) expire.
[Item 23: RECEIPTS]
ARTICLE 17 OBLIGATIONS UPON TERMINATION OR EXPIRATION
17.A. PAYMENT OF AMOUNTS OWED TO FRANCHISOR
Without limitation as to any other Article or provision of this Agreement, upon expiration or termination of this Agreement for any reason, Franchisee shall immediately pay to Franchisor all sums and fees due from Franchisee to Franchisor under the terms of this Agreement including, but not limited to Royalty Fees and Advertising Contributions and all other sums and fees due from Franchisee to Franchisor and/or Franchisor affiliates and/or suppliers for products and services including, but not limited to, System Supplies.
17.B. CEASE OPERATIONS AND PROTECTION OF THE SYSTEM
Upon expiration, termination, or Transfer of this Agreement for any reason, Franchisee shall immediately:
(1) Permanently cease to be a franchise owner of the Casiola Business that was the subject of this Agreement and cease to operate such Casiola Business under the System, except as directed by Franchisor in writing and related to Franchisee's performance and completion of Wind-Down Activities as designated and determined by Franchisor in Franchisor's Reasonable Business Judgment;
(2) Refrain from directly or indirectly, holding oneself/itself out to any person or entity, or represent themselves/itself as a present or former Casiola franchisee, except as directed by Franchisor in writing and related to Franchisee's performance and completion of Wind-Down Activities as designated and determined by Franchisor in Franchisor's Reasonable Business Judgment;
[Item 23: RECEIPTS]
(8) Take all actions necessary and/or reasonably required to cancel all fictitious or assumed names or equivalent registrations relating to the Licensed Marks;
(9) At no cost to Franchisor, take such action as may be determined by Franchisor to: (a) provide and assign to Franchisor the Bookings and Management System, the Bookings and Management System Data, and all customer lists, customer information, and customer data; and (b) transfer, disconnect, and/or otherwise assign, as directed by Franchisor, all telephone numbers, email addresses, yellow pages telephone directories, telephone directory type listings, Web Based Media listings, accounts and log-in information used in connection with Franchisee's former Casiola Business and/or otherwise associated with the System and/or the Licensed Marks, cancel Franchisee's interests in same as such cancellation may be directed by Franchisor, and effectuate, perform, honor, and comply with Franchisee's obligations under the Assignment of Telephone Numbers and Digital Media Accounts attached to this Agreement as Exhibit 3;
(10) Except as directed by Franchisor in writing and related to Franchisee's performance and completion of Wind-Down Activities as designated and determined by Franchisor in Franchisor's Reasonable Business Judgment, abide by, and comply with, the restrictive covenants and obligations set forth in this Agreement, including, without limitation, the restrictive covenants and obligations set forth in Article 6 of this Agreement; and
(11) Provide Franchisor, within 30 days of the expiration, termination, or Transfer of this Agreement, with written proof demonstrating that Franchisee has complied with the terms of this Article 17 and all other obligations under this Agreement that Franchisee must perform, abide by, and comply with, subsequent to the termination, expiration, or Transfer of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
Based on the 2024 Casiola Franchise Disclosure Document, Article 17 outlines the obligations of the franchisee upon termination or expiration of the franchise agreement. These obligations include payment of all outstanding amounts, ceasing operations as a Casiola franchise, and protecting the Casiola system. The FDD states that all obligations within the agreement that are intended to survive the termination of the agreement will remain in full effect.
Specifically, the franchisee must take actions to cancel any assumed names related to the licensed marks, transfer the Bookings and Management System and customer data to Casiola, and transfer or disconnect all telephone numbers, email addresses, and web-based media listings associated with the Casiola business. The franchisee must also comply with restrictive covenants, such as those in Article 6, which prevent the franchisee from using Casiola's know-how in any other business.
Within 30 days of termination, the franchisee must provide written proof to Casiola demonstrating compliance with Article 17 and all other post-termination obligations. The consequences of non-compliance with Article 17 are not explicitly detailed in the provided excerpts.
A prospective franchisee should carefully review Article 17 and related sections of the Franchise Agreement to fully understand all post-termination obligations and the potential ramifications of failing to meet them. It would be prudent to seek clarification from Casiola regarding the specific remedies or penalties for non-compliance, which may include legal action or financial repercussions.