What are some examples of non-curable defaults that could lead to termination of a Chocolate Bash franchise agreement?
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, there are specific actions that constitute non-curable defaults, which means that if a franchisee commits these violations, Chocolate Bash has the right to terminate the franchise agreement immediately without providing an opportunity to correct the issue.
These non-curable defaults include misrepresentation when applying to become a franchisee, knowingly submitting false information, bankruptcy, losing possession of the location, violating any law, violating confidentiality or non-compete agreements, violating transfer restrictions, slandering or libeling Chocolate Bash, refusing to cooperate with a business inspection, ceasing operations for more than five consecutive days, incurring three defaults within a 12-month period, experiencing cross-termination (termination of another agreement), being convicted of a felony, or being accused of an act that could negatively impact the Chocolate Bash brand. Additionally, any other breach of the franchise agreement that cannot be rectified is also considered a non-curable default.
For franchisees who also sign a Multi-Unit Development Agreement (MUDA), non-curable defaults also include failure to meet the development schedule outlined in the MUDA or violating the franchise agreement or any other agreement in a way that gives Chocolate Bash the right to terminate it. This means that Chocolate Bash holds franchisees to a high standard of conduct and strict adherence to the franchise agreement, with severe consequences for breaches that are deemed irreparable.