Is ceasing operations for more than 5 consecutive days considered a non-curable default for a Chocolate Bash franchise?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise | Summary |
|---|---|---|
| h. “Cause” defined--non- | FA: § 14.2 | FA: Misrepresentation when applying to be a |
| curable defaults | ||
| MUDA: § 4 | franchisee; knowingly submitting false information; bankruptcy; lose possession of your location; violation of law; violation of confidentiality; violation of non-compete; violation of transfer restrictions; slander or libel of us; refusal to cooperate with our business inspection; cease operations for more than 5 consecutive days; three defaults in 12 months; cross-termination; conviction of a felony, or accusation of an act that is reasonably likely to materially and unfavorably affect our brand; any other breach of franchise agreement which by its nature cannot be cured. MUDA: failure to meet development schedule; violation of franchise agreement or other agreement which gives us the right to terminate it. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 30–34)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, ceasing operations for more than 5 consecutive days is indeed considered a non-curable default under the Franchise Agreement (FA). This is explicitly stated in Section 14.2 of the FA, as summarized in Item 17. This means that if a Chocolate Bash franchisee closes their business for more than 5 days in a row, Chocolate Bash has grounds to terminate the franchise agreement without providing an opportunity for the franchisee to correct the issue.
This provision carries significant implications for prospective Chocolate Bash franchisees. It highlights the importance of maintaining continuous operation of the franchise. Unforeseen circumstances such as equipment malfunctions, supply chain disruptions, or staffing shortages could potentially lead to a default if they cause the business to close for more than 5 consecutive days. Franchisees need to have contingency plans in place to address such situations and minimize any potential disruptions to their business operations.
It's important to note that this is classified as a 'non-curable' default, meaning that Chocolate Bash is not obligated to give the franchisee a chance to rectify the situation before terminating the agreement. This differs from 'curable' defaults, such as non-payment, where the franchisee typically has a specified period (e.g., 10 days) to remedy the issue. Therefore, franchisees must be vigilant in ensuring continuous operation to avoid this severe consequence. Prospective franchisees should carefully consider their ability to maintain uninterrupted service before investing in a Chocolate Bash franchise.