Under what conditions can the Casiola franchise agreement be automatically terminated without notice or opportunity to cure?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
solved;
- (j) A cause of action or lawsuit to foreclose any lien or mortgage against the assets of the Franchised Business;
- (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
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, Casiola can terminate the franchise agreement immediately without giving the franchisee a chance to fix the problem under specific circumstances. These circumstances involve repeated defaults or intentional breaches of the agreement that are intended to harm Casiola or its system.
Specifically, if a Casiola franchisee engages in actions that would qualify as a default under Articles 16.A.(3) and/or 16.A.(4) of the agreement on three or more occasions, Casiola can terminate the agreement. This is true regardless of whether Casiola previously issued a notice of default for those actions, whether the franchisee fixed the problem, or whether the franchisee paid any penalties or additional fees. Additionally, if a franchisee intentionally and knowingly refuses to comply with or breaches any term of the agreement with the intent of causing harm to Casiola or the Casiola system, the agreement can be terminated immediately.
This means a Casiola franchisee needs to be extremely careful to avoid repeated violations of the franchise agreement, even if they are minor and quickly corrected. Any intentional act that could be seen as harmful to the brand could also lead to immediate termination. This is a stricter standard than many franchises, which typically provide a cure period for most violations before termination.