What happens if a levy or execution is made against the Chocolate Fish Coffee business?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- (iii) a receiver or trustee for the Business or all or substantially all of Franchisee's property is appointed by any court, or Franchisee makes a general assignment for the benefit of Franchisee's creditors, or Franchisee is unable to pay its debts as they become due, or a levy or execution is made against the Business, or an attachment or lien remains on the Business for 30 days unless the attachment or lien is being duly contested in good faith by Franchisee, or a petition in bankruptcy is filed by Franchisee, or such a petition is filed against or consented to by Franchisee and the petition is not dismissed within 45 days, or Franchisee is adjudicated as bankrupt;
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to the 2024 Chocolate Fish Coffee Franchise Disclosure Document, if a levy or execution is made against the Chocolate Fish Coffee business, it constitutes a breach of the Franchise Agreement. Specifically, it is grounds for Chocolate Fish Franchising to terminate the agreement.
This means that if a legal judgment results in a seizure or execution against the assets of the Chocolate Fish Coffee franchise, Chocolate Fish Franchising has the right to terminate the franchise agreement. The franchisee would likely lose the right to operate the Chocolate Fish Coffee business. This clause protects Chocolate Fish Franchising from potential damage to its brand and reputation that could arise from a franchisee's financial instability or legal issues.
It is important to note that the franchisee has a limited window to contest any attachment or lien. If an attachment or lien remains on the business for 30 days, and is not being contested in good faith, this also constitutes grounds for termination. This highlights the importance of franchisees maintaining sound financial practices and addressing any legal or financial claims promptly to avoid jeopardizing their franchise agreement with Chocolate Fish Coffee.