If a Casiola franchisee defaults on the Franchise Agreement, how long does the franchisee have to cure the default after receiving written notice from the Franchisor?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
lt set forth in this Article 16.A.(3) shall exclude events of default that are otherwise governed by and/or constitute events of default under Article 16.A.(1) or Article 16.A.(2). In the event of any inconsistency or conflict between the provisions of this Article 16.A.(3) with Article 16.A.(1), Article 16.A.(1) shall take precedence and govern. In the event of any inconsistency or conflict between the provisions of this Article 16.A.(3) with Article 16.A.(2), Article 16.A.(2) shall take precedence and govern.
- (4) Defaults and Automatic Termination After 30 Day Cure Period Franchisee shall be in default of this Agreement and, this Agreement shall be terminated, upon the occurrence of any one or more of the following actions, inactions, omissions, events, and/or circumstances, unless, Franchisee timely cures, to the satisfaction of Franchisor, such default/action, inaction, omission, event, and/or circumstance within 30 calendar days of Franchisor's written notice:
- (a) Franchisee fails or refuses to comply with and/or breaches any term, condition, provision, and/or requirement of this Agreement that is not otherwise a default under Articles 16.A.(1), 16.A.(2), or 16.A.(3) of this Agreement;
- (b) Franchisee fails or refuses to comply with and/or breaches any term, condition, provision, and/or requirement of any agreement, other than this Agreement, between Franchisor and Franchisee, and/or an affiliate of Franchisor and Franchisee;
- (c) Franchisee fails or refuses, in accordance with the terms of this Agreement, to obtain and secure a signed lease agreement or fee simple ownership interest in an approved location for Franchisee's non-residential Administrative Office;
- (d) Franchisee fails or refuses to develop and open the Franchised Business on or before the Scheduled Opening Date, in compliance with the terms of this Agreement, as designated or specified in the Operations Manual, and/or in accordance with Franchisor's standards and specifications as communicated to Franchisee from time to time;
- (e) Franchisee fails or refuses, at any time, to manage, maintain, and/or operate the Franchised Business in compliance with the terms of this Agreement, as designated or specified in the Operations Manual, and/or in accordance with Franchisor's standards, specifications, and requirements as communicated to Franchisee from time to time;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, the cure period for a default varies. In some instances, Casiola may terminate the Franchise Agreement immediately upon written notice without providing any opportunity to cure the default. This can occur if a franchisee engages in actions that constitute a default on three or more occasions, even if the defaults were previously cured or penalties were paid. Additionally, Casiola can immediately terminate the agreement if a franchisee intentionally breaches the agreement to harm Casiola, the system, other franchisees, or customers.
However, in other situations, a Casiola franchisee has an opportunity to cure their default. Specifically, if the default falls under the conditions outlined in Article 16.A.(4) of the agreement, the franchisee has 30 days to cure the default after receiving written notice from Casiola. If the franchisee successfully addresses the issue to Casiola's satisfaction within this period, the agreement will not be terminated.
It is important to note that Michigan-based Casiola franchisees have certain protections. Michigan law stipulates that a franchisee must be given written notice of any failure to comply with the Franchise Agreement and a reasonable opportunity to cure the failure, which need not be more than 30 days. This provision ensures that Michigan franchisees have at least 30 days to correct any deficiencies before Casiola can terminate the agreement for good cause. Prospective franchisees should carefully review Article 16 of the Franchise Agreement to fully understand the circumstances that trigger a default and the applicable cure periods.