Under what conditions can Cr3 American Exteriors terminate a franchise agreement before its expiration?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
Effect of Termination
Expiration or termination does not relieve any duties to comply with all of the provisions of this Agreement that require performance post-termination.
8.2. Termination by You
You may terminate this Agreement by not renewing ("Expiration"). On Expiration you must comply with all the provisions of this Agreement that require performance posttermination.
8.3. Termination by Us
We may terminate this Agreement without notice and the opportunity to cure for any of the following reasons:
(i) If you do not pass our Initial Training in accordance with our passing standards;
(ii) If you fail to obtain our approval or open on time;
(iii) If you become insolvent, meaning unable to pay your bills in the ordinary course as they become due;
(iv) If you commit a material violation of any law, ordinance, rule, or regulation of a governmental agency or department reasonably associated with the operation of the Franchised Business or if you are convicted of or plead guilty or no contest to a felony;
(v) If you threaten physical
(vi) If you abandon the Franchised Business or discontinue the active operation of the Franchised Business for three or more weeks, except when active operation is not reasonably possible, such as because of a natural disaster, illness, or death;
(vii) If you include a materially false representation or omission of fact in your Confidential Franchise Application to us;
(viii) If you or your principals commit any fraud or misrepresentation in the operation of the Franchised Business;
(ix) If you or your principals materially breach any other agreement with us or any of our affiliates, or threaten any material breach of any such agreement, and fail to cure such breach within any permitted period for cure;
(x) If you or your principals, employees, or affiliates engage in, encourage, or threaten acts of violence, harassment, or intimidation against us, our employees, other franchisees, or customers. For the purposes of this provision, a "threat of violence" includes, but is not limited to, verbal or written threats, physical altercations, or any conduct that would cause a reasonable person to fear for their safety or well-being;
(xi) You fail to pay suppliers an amount exceeding $3,000 for more than sixty (60) days;
(xii) You fail to permit us to inspect or audit your franchise;
(xiii) You intentionally underreport any payment amount on any report to us;
(xiv) If an audit reveals that any payment amount was understand by you on any report to us by more than 2% and you fail to pay all amounts due within five (5) days; or
(xv) If you commit three or more breaches of this Agreement, the Manuals, or any other agreement with us, in any twelve (12) month period regardless of whether such breaches were cured after notice.
8.4. Termination by Us with the Opportunity to Cure
We may terminate this Agreement, if the following conditions remain within thirty (30) days after sending you notice and an opportunity to cure:
- (i) You violate any other term or condition of this Agreement, the Franchisee Manuals, or any other agreement with us; or
- (ii) Any amount owing to us from you is more than thirty (30) days past due.
8.5. No Refund of Initial Fee
We have no obligation to return or refund any fee to you upon termination or expiration of this Agreement.
8.6. Post Termination Obligations
If this Agreement expires, is not renewed, or is terminated for any
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
According to Cr3 American Exteriors' 2025 Franchise Disclosure Document, Cr3 American Exteriors can terminate the franchise agreement without notice or an opportunity to cure under several circumstances. These include failing the initial training, not obtaining approval or opening on time, or becoming insolvent, which means being unable to pay bills as they become due. Termination can also occur if the franchisee commits a material violation of laws related to the business's operation, is convicted of a felony, threatens physical harm, abandons the business for three or more weeks (unless due to unavoidable circumstances like natural disasters), includes false information in the franchise application, or commits fraud or misrepresentation in operating the franchise. Furthermore, Cr3 American Exteriors can terminate the agreement if the franchisee breaches any other agreement with Cr3 American Exteriors or its affiliates and fails to cure the breach, or if the franchisee engages in acts of violence, harassment, or intimidation against Cr3 American Exteriors, its employees, other franchisees, or customers.
Additional grounds for immediate termination by Cr3 American Exteriors include failing to pay suppliers an amount exceeding $3,000 for more than sixty days, not allowing Cr3 American Exteriors to inspect or audit the franchise, intentionally underreporting any payment amount, or understating any payment amount by more than 2% in an audit and failing to pay the due amounts within five days. Finally, Cr3 American Exteriors can terminate the agreement if the franchisee commits three or more breaches of the agreement, manuals, or any other agreement with Cr3 American Exteriors within a twelve-month period, regardless of whether the breaches were cured.
Cr3 American Exteriors may terminate the agreement with a 30-day notice and opportunity to cure if the franchisee violates any term or condition of the agreement, the Franchisee Manuals, or any other agreement with Cr3 American Exteriors, or if any amount owed to Cr3 American Exteriors is more than thirty days past due. Upon termination or expiration of the agreement, Cr3 American Exteriors is not obligated to refund any fees to the franchisee. The franchisee is obligated to assist in the orderly transfer of the business and deliver all business records to Cr3 American Exteriors.