What constitutes a failure to consistently pay debts for a Cinch I.T. franchise, and what are the consequences?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
reement;
- (ix) A failure by You to comply with any of Your agreements with any third parties as related to the Franchised Business;
- (x) A failure by You to sell one (1) new Managed Service Provider contract within three (3) months of completing the Performance Improvement Plan; or
- (xi) A failure by You to consistently pay the debts of the Franchised Business as they become due.
- (c) In the event You are delivered three (3) or more notices of Material Breach from Us within a twenty four (24) month period pertaining to any one (1) or more of the foregoing events of default whether or not cured after notice, during the initial term or any renewal terms of this Agreement, We shall have the right to terminate this Agreement. The effective date of any such termination notice under this Subsection shall be upon the expiration of Your receipt of fifteen (15) days written notice to that effect, or such longer period as may be required by law.
- (d) Notwithstanding the foregoing, We shall deem You to be in material breach and, at Our option, may terminate this Agreement and all rights granted under it, without affording You any opportunity to cure the breach, effective immediately after written notice of termination is received by You, if You do any of the following:
- (i) Abandon, vacate, desert, surrender, transfer control or otherwise cease operation of the Franchised Business, or fail to continuously and actively operate the Franchised Business for a period of one (1) business day or any period that indicates an intent by You to discontinue operation of the Franchised Business without Our express written consent, unless and only to the extent that You are precluded from doing so by damage to the Franchised Business due to war, act of God, civil disturbance, natural disaster, labor dispute or other events beyond Your reasonable control, and so lo
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, a franchisee will be in default of their agreement if they fail to consistently pay the debts of the franchised business as they become due.
If the franchisee fails to comply with any of the requirements or terms of the agreement, and does not correct the failure within the time specified by Cinch I.T., the agreement will terminate immediately without further notice. Other defaults include failing to remit payments when due, failing to maintain the franchised business according to Cinch I.T.'s standards, or failing to comply with agreements with third parties related to the business.
Furthermore, if Cinch I.T. delivers three or more notices of material breach within a 24-month period, regardless of whether the breaches were cured, Cinch I.T. has the right to terminate the agreement. The termination will be effective 15 days after the franchisee receives written notice, or longer if required by law. Cinch I.T. can also terminate the agreement immediately without opportunity to cure if the franchisee abandons the business or misuses the licensed rights.