What constitutes 'good cause' for Cr3 American Exteriors to terminate a franchise?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause.
This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise.
Good cause shall include, but is not limited to:
- (i) The failure of the proposed transferee to meet the franchisor's then current reasonable qualifications or standards; (ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor; (iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations; (iv) The failure of the franchisee or proposed transferee to
pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
According to Cr3 American Exteriors' 2025 Franchise Disclosure Document, 'good cause' for refusing a franchise transfer includes several specific conditions. These conditions primarily relate to the qualifications and conduct of the proposed transferee.
Specifically, Cr3 American Exteriors may refuse a transfer if the proposed transferee does not meet the franchisor's current reasonable qualifications or standards. This ensures that any new franchisee maintains the standards expected by Cr3 American Exteriors. Additionally, if the proposed transferee is a competitor of Cr3 American Exteriors, the transfer can be denied, protecting the franchisor's competitive position. The franchisor can also refuse the transfer if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations of the franchise agreement.
Furthermore, 'good cause' includes situations where the franchisee or proposed transferee has failed to pay any sums owing to Cr3 American Exteriors or has failed to cure any default in the franchise agreement at the time of the proposed transfer. This protects Cr3 American Exteriors from financial losses or unresolved contractual issues. These stipulations help Cr3 American Exteriors maintain the integrity and financial health of its franchise system by ensuring that only qualified and compliant individuals become franchisees.