Is refusal to cooperate with a Chocolate Bash business inspection considered a non-curable default?
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, refusal to cooperate with a business inspection is considered a non-curable default under the Franchise Agreement (FA) and Multi-Unit Development Agreement (MUDA). This means that Chocolate Bash has the right to terminate the franchise agreement immediately if a franchisee refuses to cooperate with a business inspection, without providing an opportunity to correct the issue.
Non-curable defaults are serious breaches of the franchise agreement that allow Chocolate Bash to terminate the agreement without notice or a chance to cure. Other examples of non-curable defaults include misrepresentation when applying to be a franchisee, knowingly submitting false information, bankruptcy, losing possession of the location, violation of law, violation of confidentiality, violation of non-compete, violation of transfer restrictions, slander or libel of Chocolate Bash, ceasing 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 the Chocolate Bash brand, and any other breach of franchise agreement which by its nature cannot be cured. For MUDA holders, failure to meet the development schedule or violation of the franchise agreement or other agreement which gives Chocolate Bash the right to terminate it are also considered non-curable defaults.
This provision highlights the importance of franchisees maintaining open communication and cooperation with Chocolate Bash. Franchisees should ensure they understand the scope and process of business inspections to avoid any misunderstandings that could lead to a non-curable default and subsequent termination of their franchise agreement. Because these defaults can lead to immediate termination, prospective franchisees should carefully consider their ability to comply with all requirements.