If a Chocolate Fish Coffee franchisee breaches the franchise agreement, what must they do to cure the breach?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
14.2 Termination by Chocolate Fish Franchising.
(a) Subject to 10-Day Cure Period. Chocolate Fish Franchising may terminate this Agreement if Franchisee does not make any payment to Chocolate Fish Franchising when due, or if Franchisee does not have sufficient funds in its account when Chocolate Fish Franchising
attempts an electronic funds withdrawal, and Franchisee fails to cure such non-payment within 10 days after Chocolate Fish Franchising gives notice to Franchisee of such breach.
- (b) Subject to 30-Day Cure Period.
If Franchisee breaches this Agreement in any manner not described in subsection (a) or (c), and Franchisee fails to cure such breach to Chocolate Fish Franchising's satisfaction within 30 days after Chocolate Fish Franchising gives notice to Franchisee of such breach, then Chocolate Fish Franchising may terminate this Agreement.
- (c) Without Cure Period.
Chocolate Fish Franchising may terminate this Agreement by giving notice to Franchisee, without opportunity to cure, if any of the following occur:
(i) Franchisee misrepresented or omitted material facts when applying to be a franchisee, or breaches any representation in this Agreement;
(ii) Franchisee knowingly submits any false report or knowingly provides any other false information to Chocolate Fish Franchising;
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to the 2024 Chocolate Fish Coffee Franchise Disclosure Document, the cure period for a breach of the franchise agreement depends on the nature of the breach. If a franchisee fails to make a payment when due or lacks sufficient funds for an electronic funds withdrawal, Chocolate Fish Coffee must provide notice of the breach, and the franchisee has 10 days to cure the non-payment.
For breaches not related to payment as described above or those that can't be cured, Chocolate Fish Coffee will provide notice, and the franchisee has 30 days to resolve the breach to Chocolate Fish Coffee's satisfaction. However, there are certain circumstances where Chocolate Fish Coffee can terminate the agreement without providing an opportunity to cure the breach. These circumstances include misrepresentation or omission of material facts during the application process, submission of false reports or information to Chocolate Fish Coffee, or situations where the franchisee's actions could negatively impact the Chocolate Fish Coffee brand.
It is important to note that the specific steps required to cure a breach will depend on the nature of the breach itself. For instance, if the breach involves a failure to comply with brand standards, the franchisee may need to take corrective actions to bring the business into compliance. If the breach involves a failure to meet certain performance targets, the franchisee may need to develop and implement a plan to improve performance. Franchisees should carefully review the franchise agreement and consult with an attorney to understand their rights and obligations in the event of a breach.