What constitutes 'good cause' for Cr3 American Exteriors to terminate a franchise agreement?
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's 2025 Franchise Disclosure Document, the definition of 'good cause' for franchise termination is relevant in the context of franchise transfer restrictions, specifically within states like Washington.
The FDD states that a franchisor can refuse a franchise transfer only for 'good cause.' This 'good cause' includes several specific scenarios. First, if the proposed transferee does not meet Cr3 American Exteriors's current reasonable qualifications or standards, the transfer can be denied. Second, if the proposed transferee is a competitor of Cr3 American Exteriors or its subfranchisor, this also constitutes 'good cause' to refuse the transfer. Third, if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations of the franchise agreement, the transfer can be blocked. Finally, 'good cause' exists if either the franchisee or the proposed transferee has not paid all sums owed to Cr3 American Exteriors or has failed to correct any existing default in the franchise agreement at the time of the proposed transfer.
These conditions provide Cr3 American Exteriors with specific, justifiable reasons to prevent a transfer, ensuring that any new franchisee meets their standards, is not a competitive threat, and is financially responsible and compliant with the franchise agreement. This protects the integrity and standards of the Cr3 American Exteriors brand and network.