Can Counselor Realty terminate the agreement for a single instance of a material breach?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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 Counselor Realty's 2025 Franchise Disclosure Document, Counselor Realty can terminate the franchise agreement if the franchisee performs any intentional, material, repeated, or continuous breach of the agreement. In most cases, Counselor Realty must provide 60 days' written notice specifying the cause for termination, and the franchisee has 30 days to cure the breach. However, if the breach involves non-payment of sums due, the franchisee only has seven days to cure the breach. If the franchisee fails to cure the breach within the allotted time, the agreement will terminate at the end of the 60-day notice period.
However, there are certain circumstances where Counselor Realty can terminate the agreement immediately upon delivery of notice. These include situations where the franchisee misrepresents or omits material information on their application, fails to locate a suitable site or open the office for business within the required time, becomes insolvent or bankrupt, transfers or attempts to transfer the agreement without consent, abandons the agreement, office, or business, is convicted of certain charges, performs any act that impairs the goodwill associated with the marks, or is in continuous or repeated breach of the agreement.
It is important to note the distinction between a single material breach that is intentional and one that is not. While Counselor Realty must provide an opportunity to cure for most breaches, certain actions, such as those that immediately harm the brand's goodwill or involve illegal activities, can lead to immediate termination. Prospective franchisees should carefully review the franchise agreement to understand the specific conditions that could lead to termination and the procedures involved.