Are three defaults in 12 months 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, three defaults within a 12-month period are considered a non-curable default, which could lead to the termination of the franchise agreement. This is outlined in Item 17, which details the conditions under which Chocolate Bash can terminate the franchise agreement for cause.
Specifically, the FDD lists 'three defaults in 12 months' as one of the defined instances of 'cause' that constitutes a non-curable default. This means that if a franchisee commits three separate defaults within a single year, Chocolate Bash has grounds to terminate the agreement without providing an opportunity to cure the defaults.
This provision is important for prospective franchisees to understand, as it highlights the need to maintain consistent compliance with the franchise agreement. Failing to do so could result in the loss of the franchise. Franchisees should ensure they fully understand what constitutes a default under the agreement to avoid triggering this clause.