What constitutes a breach of the Crown Gold Exchange agreement that cannot be cured?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
uch a petition is filed against or consented to by Franchisee and the petition is not dismissed within 45 days, or Franchisee is adjudicated as bankrupt;
- (iv) Franchisee fails to open for business by the date specified on the Summary Page;
- (v) Franchisee loses possession of the Location;
- (vi) Franchisee or any Owner commits a material violation of Section 7.2 (compliance with laws) or Section 13.1 (confidentiality), violates Section 13.2 (non-compete) or Article 15 (transfer), or commits any other violation of this Agreement which by its nature cannot be cured;
- (vii) Franchisee abandons or ceases operation of the Business for more than five consecutive days;
- (viii) Franchisee or any Owner slanders or libels Crown Gold Franchising or any of its employees, directors, or officers;
- (ix) Franchisee refuses to cooperate with or permit any audit or inspection by Crown Gold Franchising or its agents or contractors, or otherwise fails to comply with Section 10.5 or Section 11.2;
- (x) the Business is operated in a manner which, in Crown Gold Franchising's reasonable judgment, constitutes a significant danger to the health or safety of any person, and Franchisee fails to cure such danger within 48 hours after becoming aware of the danger (due to notice from Crown Gold Franchising or otherwise);
- (xi) Franchisee has received two or more notices of default and Franchisee commits another breach of this Agreement, all in the same 12-month period;
- (xii) Crown Gold Franchising (or any affiliate) terminates any other agreement with Franchisee (or any affiliate) due to the breach of such other agreement by Franchisee (or its affiliate) (provided that termination of a Multi-Unit Development Agreement with Franchisee or its affiliate shall not give Crown Gold Franchising the right to terminate this Agreement);
- (xiii) Franchisee or any Owner is charged with, pleads guilty or no-contest to, or is convicted of a felony; or
- (xiv) Franchisee or any Owner is accused by any governmental authority or third party of any act, or if Franchisee or any Owner commits any act or series of acts, that in Crown Gold Franchising's opinion is reasonably likely to materially and unfavorably affect the Crown Gold Exchange brand.
- 14.3 Effect of Termination. Upon termination or expiration of this Agreement, all obligations that by their terms or by reasonable implication survive termination, including those pertaining to non-competition, confidentiality, indemnity, and dispute resolution, will remain in effect, and Franchisee must immediately:
- (i) pay all amounts owed to Crown Gold Franchising based on the operation of the Business through the effective date of termination or expiration;
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, certain violations of the franchise agreement allow Crown Gold Franchising to terminate the agreement without providing an opportunity for the franchisee to correct the issue. These breaches include misrepresenting or omitting material facts during the application process, knowingly submitting false reports or information to Crown Gold Franchising, or the appointment of a receiver or trustee for the business. Additionally, events such as the franchisee making a general assignment for the benefit of creditors, being unable to pay debts, or facing bankruptcy proceedings that are not dismissed within 45 days also constitute incurable breaches.
Further, Crown Gold Exchange can terminate the agreement without a cure period if the franchisee fails to open for business by the date specified in the Summary Page or loses possession of the business location. These situations are considered severe enough to warrant immediate termination, reflecting the franchisor's need to maintain brand standards and operational integrity.
Additionally, if a franchisee or any owner commits a material violation of compliance with laws or confidentiality, violates non-compete agreements or transfer restrictions, or commits any other violation of the agreement which by its nature cannot be cured, Crown Gold Exchange can terminate the agreement. Other actions that can lead to termination without a cure period include franchisee slander or libel against Crown Gold Franchising or its employees, refusal to cooperate with audits or inspections, or operating the business in a way that poses a significant danger to health or safety without correcting it within 48 hours of awareness. Finally, being charged with or convicted of a felony, or committing any act that could unfavorably affect the Crown Gold Exchange brand, also constitute incurable breaches.