factual

What is the cure period for a Crisp & Green franchisee's failure to comply with the Franchise Agreement?

Crisp_Green Franchise · 2024 FDD

Answer from 2024 FDD Document

Affiliates, and do not correct such failure within ten (10) days after written notice of such failure is delivered to you;

  • (m) understate the Franchised Restaurant's Gross Sales two (2) times or more during the Term or by more than ten percent (10%) on any one occasion;
  • (n) fail to make a timely payment of any amount due to a supplier unaffiliated with us (other than payments which are subject to bona fide dispute), and do not correct such failure within thirty (30) days after we deliver to you notice of such failure to comply;
  • (o) fail to comply with any other provision of this Agreement or any mandatory specification, standard or operating procedure prescribed by us in this Agreement or in the Operations Manual and do not correct such failure within thirty (30) days after notice of such failure to comply is delivered to you;
  • (p) fail on three (3) or more separate occasions within any period of twelve (12) consecutive months to submit when due reports or other data, information or supporting records or to pay when due royalties, contributions to local or regional advertising cooperatives, or other payments due us, any of our Affiliates or any unaffiliated suppliers or otherwise fail to comply with this Agreement or the Operations Manual, whether or not such failure is corrected after notice is delivered to you; or
  • (q) are in default or suffer termination of any other agreement with us or any of our Affiliates.

If a default is curable under this Agreement, and the applicable law in the state in which the Premises is located cannot be waived and requires a longer cure period than that specified in this Agreement, the longer period will apply. In addition to our right to terminate this Agreement pursuant to this Section 14.02 and to all of our other remedies under this Agreement, (i) if you fail to cure any default that is curable under this Agreement after written notice from us within the time period provided for such cure, we may charge you up to $1,500 for each day for which such

default continues uncured to offset our expenses incurred in connection with addressing such default, and (ii) if the default is one that cannot be cured, we may charge you a fee of $1,500.

14.03 Cross-Default. Any default or breach by you (or any of your Principal Owners) or your Affiliate (or any of your Principal Owners' Affiliates) of any other agreement with us or our Affiliate will be considered an event of default under this Agreement, and any default or breach by you (or any of your Principal Owners) of this Agreement will be considered an event of default or breach by you under any and all agreements between us or our Affiliate and you (or any of your Principal Owners) or your Affiliate (or any of your Principal Owners' Affiliates). If the nature of the default under any other agreement would have been considered an event of default under this Agreement, then we or our Affiliate will have the right to terminate all other agreements between us or our Affiliate and you (or any of your Principal Owners) or your Affiliate (or any of your Principal Owners' Affiliates) in accordance with the termination provisions of this Agreement. Notwithstanding the foregoing, if you developed the Franchised Restaurant pursuant to an Area Development Agreement that terminates solely as a result of your failure to comply with the development schedule set forth in the Area Development Agreement, then such termination of the Area Development Agreement will not result in a termination (constructive or otherwise) of this Agreement if you have fully performed and otherwise been in compliance with all of your obligations under this Agreement.

14.04 Damages for Termination. In the event of any default by you that results in a premature termination of this Agreement (regardless of which party actually terminates this Agreement), in addition to any other remedies available to us, you must pay us, as a measure of our actual damages and not as a penalty, an amount equal to the average monthly fees paid or owed to us by you during the 12 months of operation preceding the effective date of termination (provided that if the Franchised Restaurant was not open during this entire 12-month period, we may use the Minimum Royalty Fee during such time period), multiplied by the lower of (a) 36 (being the number of months in three full years), or (b) the number of months remaining in the Term of this Agreement had it not been terminated.

15. RENEWAL RIGHTS.

15.01 Your Right To Acquire a Successor Franchise. Subject to the conditions contained in the entirety of this Section 15, you shall automatically acquire a successor franchise agreement for the Franchised Restaurant on the terms and conditions of a then current form of franchise agreement for Restaurants, as further described in Section 15.03 below, unless we advise you, in our sole and absolute discretion, ninety (90) days before this Agreement's expiration that the Agreement will not auto-renew.

15.02 Notices. You must give us written notice of your desire not to renew your Franchise Restaurant at least one hundred and eighty (180) days prior to the expiration of this Agreement.

Source: Item 23 — RECEIPTS (FDD pages 66–252)

What This Means (2024 FDD)

According to the 2024 Crisp & Green Franchise Disclosure Document, a franchisee typically has 30 days to correct a failure to comply with the Franchise Agreement after receiving written notice. This applies to failures such as not making timely payments to unaffiliated suppliers or failing to adhere to mandatory specifications or operating procedures. However, there are exceptions where no cure period is provided.

Specifically, if a franchisee understates the Franchised Restaurant's Gross Sales two or more times during the term, or by more than 10% on any one occasion, it constitutes a default. Additionally, if a franchisee fails on three or more separate occasions within any 12-month period to submit reports or make payments when due, there may be no opportunity to cure the default. Also, if it is the third failure to comply with any provision of any agreement that the franchisee or any of its affiliates have with Crisp & Green or an affiliate of theirs within 12 consecutive months, then Crisp & Green does not need to provide any opportunity to cure the default.

It's important to note that if the applicable law in the state where the Premises is located requires a longer cure period than specified in the Franchise Agreement and cannot be waived, the longer period will apply. Furthermore, Crisp & Green has the right to charge the franchisee up to $1,500 for each day the default continues uncured, to offset expenses incurred in addressing the default. If the default is one that cannot be cured, Crisp & Green may charge a fee of $1,500.

In South Dakota, a franchisee must receive 30 days prior written notice from Crisp & Green and be provided with an opportunity to cure defaults for breaches, failure to meet performance standards, and/or failure to make royalty or advertising payments. In Minnesota, a franchisee must be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for nonrenewal of the franchise agreement, except in certain specified cases.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.