What rights does the Coffee News franchisor have if the franchisee breaches the franchise agreement?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
. In no event shall any monies _, 20, which is called the "maturity date." by time without penalty. | | month until he/she have paid all of the | | | described above that he/she may owe ur | |
The Debtor acknowledges and hereby agrees to grant Holder, with any and all the licensed rights to the territory that was granted to Debtor in the foregoing Coffee News Franchise Agreement, to secure the payment set forth in this Promissory Note and to secure the performance of all covenants and agreements contained herein. In the event of a failure to pay interest, principal or any other amount due on this Promissory Note in accordance with its terms, or of a breach of any other covenant, condition or agreement contained herein, remaining uncured for a period in excess of five (5) days (except that no grace period shall be permitted for a default under this Note or the foregoing Coffee News Franchise Agreement), or any breach in the covenants, conditions or agreements in any instrument given in connection with the Promissory Note and debt secured hereby, or if a proceeding in bankruptcy, receivership or insolvency shall be instituted by or against the undersigned, or if the foregoing Coffee News Franchise Agreement for which the parties have entered into this Promissory Note is terminated for any reason, then the entire debt secured hereby, together with all charges to which Holder would be entitled under the Promissory Note or by law if the Promissory Note were prepaid in full, shall be due and payable, Holder shall have the right to realize upon the security granted herein, and the payment and acceptance of any sum on account of this note shall not be considered a waiver of such right of election. The failure at any time of Holder to exercise this option shall not constitute a waiver of
the right to exercise the right at any other time.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, the franchisor has specific rights if a franchisee fails to meet their obligations, particularly concerning payments tied to a Promissory Note. If a franchisee fails to pay interest, principal, or any other amount due on the Promissory Note, or breaches any covenant within it, and this remains uncured for more than five days, the entire debt becomes immediately due. This acceleration of debt also applies to breaches of covenants in any instrument connected to the Promissory Note.
Additionally, if a franchisee enters bankruptcy, receivership, or insolvency proceedings, or if the Coffee News Franchise Agreement is terminated for any reason, the franchisor can demand immediate payment of the entire debt, including all associated charges. The franchisor can then act upon the security granted, which includes the right to sell the franchise that was originally granted to the franchisee.
It is important to note that the franchisor's acceptance of any payment does not waive their right to exercise these options in the event of a breach. The franchisor's failure to exercise these rights at one time does not prevent them from doing so at a later time. This clause ensures that Coffee News retains the power to enforce the financial obligations and agreements tied to the franchise, protecting their interests in case of franchisee default or financial instability.