Does Counselor Realty have to provide a reason for immediate termination of the franchise agreement?
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, Counselor Realty can terminate the franchise agreement immediately under certain conditions, and these conditions serve as the reason for termination. Counselor Realty is required to provide notice upon delivery if the franchisee: misrepresents or omits material information on the application; fails to locate a suitable site or open the office for business within the required time frame; becomes insolvent or bankrupt; transfers or attempts to transfer the agreement without consent; abandons the agreement, the office, or the business; is convicted of or pleads guilty to violating any law related to the office or business, or of any felony; performs any act that impairs the goodwill associated with the marks; or is in continuous or repeated breach of the agreement.
These immediate termination conditions are important for a prospective franchisee to understand. Unlike terminations for 'good cause' which require a 60-day written notice and an opportunity to cure the breach (except for non-payment, which has a 7-day cure period), these specified conditions allow Counselor Realty to terminate the agreement immediately upon notice. This means the franchisee must cease operations immediately without an opportunity to rectify the situation.
The conditions for immediate termination cover serious breaches of the agreement, such as misrepresentation, abandonment, or illegal activities. They also address situations where the franchisee fails to meet critical obligations, such as opening the business on time or maintaining solvency. The inclusion of actions that 'impair or threaten to impair the goodwill associated with the Marks' highlights the importance Counselor Realty places on protecting its brand reputation.
It is essential for a potential Counselor Realty franchisee to carefully review these termination conditions and ensure they fully understand their obligations under the franchise agreement. Failure to comply with these terms could result in the immediate loss of their franchise, without any opportunity to correct the issue. This underscores the need for franchisees to operate with integrity, maintain financial stability, and adhere strictly to the terms of the franchise agreement.