If a Crawlspace Medic franchisee files for bankruptcy, is that considered a curable default?

According to Crawlspace Medic's 2024 Franchise Disclosure Document, a franchisee filing for bankruptcy constitutes a non-curable default. This means that if a Crawlspace Medic franchisee declares bankruptcy, the franchise agreement can be terminated immediately by Crawlspace Medic without any opportunity for the franchisee to rectify the situation.

Specifically, the FDD states that the Franchise Agreement will terminate automatically, without notice, if the franchisee declares insolvency, bankruptcy, or makes a written admission of inability to pay debts. Other events that trigger automatic termination include receivership, levy, composition with creditors, an unsatisfied final judgment for more than 30 days, or a foreclosure proceeding that is not dismissed within 30 days.

This is a significant point for prospective franchisees to consider. Unlike some other defaults that Crawlspace Medic might allow a franchisee to correct within a specified timeframe, bankruptcy is treated as an immediate and irreversible breach of the franchise agreement. This policy reflects the franchisor's concern about the financial stability and operational viability of its franchisees, and the potential impact of a franchisee's financial distress on the Crawlspace Medic brand and system.