What constitutes abandonment of the Counselor Realty franchise agreement, office, or business?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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 Counselor Realty's 2025 Franchise Disclosure Document, the franchise agreement can be terminated immediately if the franchisee abandons the agreement, the office, or the business. This is outlined in Section 11, which details the conditions under which Counselor Realty can terminate the agreement with immediate effect.
Abandonment, in this context, means the franchisee ceases operation without properly transferring the franchise or notifying Counselor Realty. This could involve closing the office, stopping business activities, or otherwise indicating a clear intention to discontinue the franchise. The FDD does not provide further clarification on what specific actions would be considered abandonment, leaving room for interpretation based on the circumstances.
For a prospective Counselor Realty franchisee, this clause underscores the importance of maintaining active engagement with the franchise and adhering to the terms of the agreement. If a franchisee faces difficulties or wishes to exit the business, it is crucial to communicate with Counselor Realty and follow the proper procedures for termination or transfer to avoid immediate termination and potential legal repercussions. Seeking clarification from Counselor Realty on what specific actions might constitute abandonment is advisable to ensure compliance and avoid unintended breaches of the agreement.