Under what conditions can Creative World School terminate the franchise agreement with cause?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
| f. | Termination by | Section | We can terminate only if you commit one of | | | franchisor with cause | 16.2 | several violations | | g. | Provision "Cause" defined – | Section in Franchise or Other Agreement Section 16.2 | Summary You have 5 days to cure health, safety or | |----|------------------------------------------------------------|---------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | curable defaults | | sanitation law violations and education, licensure or certification, ordinance or regulation violations; 10 days to cure monetary defaults to us or our affiliates or approved suppliers; 30 days to cure noncompliance with any provision of the Franchise Agreement or the System Standards | | h. | "Cause" defined – non curable defaults | Section 16.2 | Non-curable defaults include material misrepresentation or omission, failure to complete training to our satisfaction; failure to open within 12 months of construction approval; failure to commence construction of the School within 3 months; abandonment; unapproved transfers; conviction of, or a plea of guilty or no contest to, a felony or serious criminal misconduct or offense that we believe to indicate moral turpitude or is adverse to the Marks, indicates breach of trust, or which makes parents uneasy, uncertain or afraid to permit you to be alone with their children, is likely to adversely affect your reputation, our reputation or that of any other School; dishonest, criminal or unethical conduct; loss of the Site; unauthorized use or disclosure of the Manuals or confidential information; failure to pay taxes; failure to cure breach or default under any other agreement with us or our affiliates; repeated defaults (even if cured); an assignment for the benefit of creditors or written admission of insolvency or inability to pay debts as they become due |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 53–57)
What This Means (2025 FDD)
According to Creative World School's 2025 Franchise Disclosure Document, the franchise agreement can be terminated with cause if the franchisee commits certain violations, as detailed in Section 16.2 of the agreement. These violations are categorized into curable and non-curable defaults. For curable defaults, the franchisee is given a specific timeframe to rectify the issue.
Curable defaults include health, safety, or sanitation law violations, which must be cured within 5 days. Monetary defaults to Creative World School, its affiliates, or approved suppliers must be cured within 10 days. Noncompliance with any provision of the Franchise Agreement or the System Standards requires a 30-day cure period.
Non-curable defaults, which allow for immediate termination, include material misrepresentation or omission, failure to complete training to Creative World School's satisfaction, failure to open within 12 months of construction approval, failure to commence construction within 3 months, abandonment of the franchise, unapproved transfers of ownership, conviction of a felony or serious criminal misconduct, dishonest, criminal, or unethical conduct, loss of the site, unauthorized use or disclosure of confidential information, failure to pay taxes, failure to cure a breach under any other agreement with Creative World School, repeated defaults (even if cured), or an assignment for the benefit of creditors or written admission of insolvency.