What is considered a 'material' breach of the Counselor Realty franchise agreement?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
11. TERMINATION.
- (a) We may terminate for good cause if you perform any intentional, material, repeated or continuous breach of this Agreement. We must provide you with 60 days' written notice of termination, specifying the cause for termination. Except as provided below, you shall have 30 days from delivery of notice to cure the breach (except in the case of non-payment of sums due, in which case you shall have seven days to cure the breach). If you fail to do so this Agreement shall terminate on expiration of the 60-day notice period.
- (b) This Agreement shall terminate immediately upon delivery of notice to you if: (i) you misrepresent or omit material information on your application; or (ii) you fail to locate a suitable site or open the Office for business within the time required under section 1.2 of this Agreement; or (iii) you become insolvent or bankrupt; or (iv) you transfer or attempt to transfer this Agreement without our consent; or (v) you abandon this Agreement, the Office or the Business; or (vi) you (or a principal officer, director, or partner of Franchisee) are convicted of, or plead guilty or no contest to, any charge of violation of any law relating to the Office (including any Additional Office or Extension Office) and
Business, or of any felony; or (vii) you perform any act, or fail to take an action, the result of which impairs or threatens to impair the goodwill associated with the Marks; or (viii) you are in continuous or repeated breach of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
According to the 2025 Counselor Realty Franchise Disclosure Document, Counselor Realty may terminate the franchise agreement for good cause if the franchisee performs any intentional, material, repeated, or continuous breach of the agreement. In such cases, Counselor Realty must provide the franchisee with 60 days' written notice of termination, specifying the cause. The franchisee then has 30 days from the delivery of the notice to cure the breach, except in cases of non-payment of sums due, where the cure period is reduced to seven days. If the franchisee fails to cure the breach within the applicable timeframe, the agreement will terminate upon the expiration of the 60-day notice period.
Additionally, the Counselor Realty franchise agreement will terminate immediately upon delivery of notice to the franchisee under certain conditions. These conditions include misrepresentation or omission of material information on the franchise application, failure to secure a suitable site or open the office within the required timeframe, franchisee insolvency or bankruptcy, unauthorized transfer of the agreement, abandonment of the agreement, office, or business, conviction of the franchisee (or a principal officer, director, or partner) for violating any law related to the office or business, or any felony, any action that impairs or threatens the goodwill associated with the Counselor Realty marks, or continuous or repeated breach of the agreement.
It is important for prospective Counselor Realty franchisees to understand what constitutes a breach of the franchise agreement and the potential consequences, including termination. Understanding these terms and conditions is crucial for maintaining a successful and compliant franchise operation. Franchisees should seek legal counsel to fully understand their rights and obligations under the franchise agreement.