Under what conditions does a criminal offense committed by the Coffee News franchisee or its principal shareholder constitute a breach or default?

According to Coffee News's 2025 Franchise Disclosure Document, a criminal offense committed by the franchisee or its principal shareholder can lead to a breach or default of the franchise agreement under specific conditions. The conviction must be for a major criminal offense. Furthermore, the nature of the crime and the potential for long-term imprisonment must be such that it would cause serious damage to the reputation of the Coffee News periodical or negatively impact the effective business operation of the franchisor.

This provision protects Coffee News's brand and business interests by ensuring that neither the franchisee nor its principal shareholder engages in criminal behavior that could harm the franchise's reputation or operational capabilities. The inclusion of 'principal shareholder' extends this protection to those who have significant ownership and influence within the franchisee's business structure.

For a prospective Coffee News franchisee, this means maintaining a clean criminal record and ensuring that any principal shareholders also do so. Any major criminal conviction that reflects poorly on the Coffee News brand or hinders business operations could result in the termination of the franchise agreement. This clause highlights the importance of integrity and ethical conduct in operating a Coffee News franchise.