What is the timeframe for discharging a bankruptcy petition filed against a Crisp & Green franchisee to avoid termination?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
r our reasonable costs and expenses (including legal and accounting fees) incurred in connection with the evaluation and, if applicable, conduct of the securities offering.
14. TERMINATION OF AGREEMENT.
- 14.01 Immediate Termination. You are in material breach of this Agreement, and this Agreement will automatically terminate without notice, at our discretion, if you become insolvent by reason of your inability to pay your debts as they mature; if you are adjudicated bankrupt or insolvent; if you file a petition in bankruptcy, reorganization or similar proceedings under the bankruptcy laws of the United States or have such a petition filed against you which is not discharged within thirty (30) days; if a receiver or other custodian, permanent or temporary, is appointed for your business, assets, or property; if you request the appointment of a receiver or make a general assignment for the benefit of creditors; if a final judgment against you in the amount of Twenty-Five Thousand Dollars ($25,000) or more remains unsatisfied of record for thirty (30) days or longer; if your bank accounts, property or accounts receivable are attached; if execution is levied against your business or property; if suit is filed to foreclose any lien or mortgage against any of your assets and such suit is not dismissed within thirty (30) days; if you voluntarily dissolve or liquidate or have a petition filed for corporat
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to the 2024 Crisp & Green Franchise Disclosure Document, if a bankruptcy petition is filed against a franchisee, the franchisee has 30 days to have the petition discharged to avoid automatic termination of the franchise agreement.
Specifically, the franchise agreement states that if a franchisee has a petition in bankruptcy, reorganization, or similar proceedings filed against them, and it is not discharged within 30 days, Crisp & Green has the discretion to immediately terminate the agreement without notice. This clause provides Crisp & Green with a mechanism to protect its brand and franchise system from the potential negative impacts of a franchisee's financial instability.
It is important for prospective Crisp & Green franchisees to understand this term, as failure to resolve a bankruptcy petition within the specified timeframe could lead to the loss of their franchise. Franchisees facing such a situation should seek legal and financial advice to explore options for discharging the petition within the 30-day window or to negotiate with Crisp & Green to avoid termination.