What article of the Crawlspace Medic Franchise Agreement defines 'cause' for termination?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
ned, in our sole discretion, to withdraw from your Territory |
| | | Section in | | |----|------------------------------------------------|----------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | Franchise | | | | Provision | Agreement | Summary | | C. | Requirements for franchisee to renew or extend | Sections 5.2 and 5.3 | Be in full compliance, have no more than three (3) events of default during current term; provide written notice to us at least six months before the end of the term; execute a new franchise agreement; pay us a Successor Agreement fee equal of one thousand five hundred dollars ($1,500); continue to maintain the vehicle with proper insurance, current trade dress and other standards; execute a general release; comply with then-current qualifications and training requirements; including completion of additional training. You may be asked to sign a new Franchise Agreement with materially different terms and conditions than your original Franchise Agreement. | | d. | Termination by franchisee | None | You may seek termination upon any grounds available by state law. | | e. | Termination by franchisor without cause | Section 16.7 | The Franchise Agreement will terminate upon your death or permanent disability and the Franchise must be transferred within six months to a replacement franchisee that we approve. | | f. | Termination by franchisor with cause | Article 17 | We may terminate only if you default. The Franchise Agreement describes defaults throughout. Please read it carefully. | | g. | "Cause" defined – curable defaults | Section 17.3 | You have 5 days to cure non-payments and any other defaults (except for non-curable defaults listed in the Franchise Agreement and described in h. immediately below). |
Section in Franchise Provision Agreement Summary h. "Cause" defined - non-curable Sections 17.1 and The Franchise Agreement will terminate defaults 17.2 automatically, without notice for the following defaults: insolvency; bankruptcy; written admission of inability to pay debts; receivership; levy; composition with creditors; unsatisfied final judgment for more than 30 days; or foreclosure proceeding that is not dismissed within 30 days. We may terminate the Franchise Agreement upon notice to you if you: do not open the Franchised Business within required time frames; falsify any report to us; cease operations for 5 days or more, unless your vehicle is being repaired/replaced; fail to restore and re open the Franchised Business within 120 days after a casualty; fail to comply with applicable laws; default under any lease for the premises; understate Gross Revenue two (2) or more times; fail to comply with insurance and indemnification requirements; attempt a transfer in violation of the Franchise Agreement; fail, or your legal representative fails to transfer as required upon your death or permanent disability; misrepresent or omit a material fact in applying for the Franchise; are convicted or plead no contest to a felony or crime that could damage the goodwill or reputation of the Marks or the System;
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 33–38)
What This Means (2024 FDD)
According to the 2024 Crawlspace Medic Franchise Disclosure Document, Article 17 of the Franchise Agreement outlines the conditions under which Crawlspace Medic may terminate the agreement with cause. The FDD indicates that termination can occur if a franchisee defaults on their obligations, with specific defaults described throughout the agreement.
The document distinguishes between curable and non-curable defaults. For curable defaults, Section 17.3 allows a 5-day period to rectify non-payment or other violations, excluding the non-curable defaults.
The FDD also provides a summary of conditions that constitute 'cause' for termination. These include insolvency, bankruptcy, failure to open the franchised business within the required timeframe, falsifying reports, ceasing operations for extended periods, failure to comply with laws or insurance requirements, underreporting gross revenue, attempting unauthorized transfers, and failing to meet minimum performance requirements. Other causes include convictions of felonies or crimes that could damage Crawlspace Medic's reputation, adverse judgments involving fraud, concealing revenues, creating public health threats, refusing inspections, unauthorized use of intellectual property, and repeated defaults.