Where in the Chocolate Bash Franchise Agreement can I find information about non-curable defaults?
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, Item 17 outlines the circumstances under which the franchise agreement can be terminated, including details on both curable and non-curable defaults. The specific section addressing non-curable defaults is Section 14.2 of the Franchise Agreement and Section 4 of the Multi-Unit Development Agreement (MUDA).
Non-curable defaults, as detailed in the Franchise Agreement, include actions such as misrepresentation during the application process, knowingly submitting false information, bankruptcy, losing possession of the location, violating laws, breaching confidentiality or non-compete agreements, violating transfer restrictions, slandering or libeling Chocolate Bash, refusing to cooperate with business inspections, ceasing operations for more than five consecutive days, accumulating three defaults within 12 months, cross-termination, or being convicted of a felony. Additionally, any breach of the franchise agreement that inherently cannot be cured is considered a non-curable default. For those who sign a Multi-Unit Development Agreement, non-curable defaults also include failure to meet the development schedule or violating the franchise agreement or any other agreement, which gives Chocolate Bash the right to terminate it.
These stipulations are important for a prospective Chocolate Bash franchisee to understand because non-curable defaults can lead to immediate termination of the franchise agreement without an opportunity to correct the issue. This differs from curable defaults, such as non-payment, where the franchisee is typically given a period to remedy the situation. Therefore, franchisees must be diligent in adhering to all aspects of the franchise agreement and operating within legal and ethical boundaries to avoid such defaults and potential termination.