Does Cinch I.T. have the right to terminate the Multi-Unit Development Agreement for cause?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | agreement | Summary |
|---|---|---|
| f. Termination by us with cause | Section 7 | We have discretionary right to terminate the Multi-Unit Development Agreement for cause. Termination of the Multi Unit Development Agreement does not terminate any of the Franchise Agreements that you have signed before termination (subject to local state law). |
| g. "Cause" defined - | None | Not Applicable |
| curable defaults | ||
| h. "Cause" defined-non curable defaults | Section 32 | Cessation of business for one business day, misuse of trademark or licensed rights, having interest in a competitor, repeated defaults even if cured, abandonment, deliberate understating of sales, bankruptcy, creditors attach or foreclose business property, conviction or "no contest" plea to a felony, false statements on franchise application, unauthorized transfer, failure to maintain independent contractor status with us. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 48–56)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, Cinch I.T. has the right to terminate the Multi-Unit Development Agreement for cause. Specifically, Cinch I.T. has discretionary right to terminate the Multi-Unit Development Agreement for cause. The termination of the Multi Unit Development Agreement does not terminate any of the Franchise Agreements that you have signed before termination, although this is subject to local state law.
However, the FDD does not define what constitutes "cause" for termination in this section. The FDD states "Cause" defined - curable defaults is "Not Applicable". This means the FDD does not list any curable defaults that would allow Cinch I.T. to terminate the agreement.
However, the FDD does define "cause" for non-curable defaults. These include cessation of business for one business day, misuse of trademark or licensed rights, having interest in a competitor, repeated defaults even if cured, abandonment, deliberate understating of sales, bankruptcy, creditors attach or foreclose business property, conviction or "no contest" plea to a felony, false statements on franchise application, unauthorized transfer, failure to maintain independent contractor status with us.