What constitutes 'good cause' for termination of a Crown Gold Exchange franchise in Indiana?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
- (a) Subject to 10-Day Cure Period. Crown Gold Franchising may terminate this Agreement if Franchisee does not make any payment to Crown Gold Franchising when due, or if Franchisee does not have sufficient funds in its account when Crown Gold Franchising attempts an electronic funds withdrawal, and Franchisee fails to cure such non-payment within 10 days after Crown Gold Franchising gives notice to Franchisee of such breach.
- (b) Subject to 30-Day Cure Period. If Franchisee breaches this Agreement in any manner not described in subsection (a) or (c), and Franchisee fails to cure such breach to Crown Gold Franchising's satisfaction within 30 days after Crown Gold Franchising gives notice to Franchisee of such breach, then Crown Gold Franchising may terminate this Agreement.
- (c) Without Cure Period. Crown Gold Franchising may terminate this Agreement by giving notice to Franchisee, without opportunity to cure, if any of the following occur:
(i) Franchisee misrepresented or omitted material facts when applying to be a franchisee, or breaches any representation in this Agreement;
(ii) Franchisee knowingly submits any false report or knowingly provides any other false information to Crown Gold Franchising;
(iii) a receiver or trustee for the Business or all or substantially all of Franchisee's property is appointed by any court, or Franchisee makes a general assignment for the benefit of Franchisee's creditors, or Franchisee is unable to pay its debts as they become due, or a levy or execution is made against the Business, or an attachment or lien remains on the Business for 30 days unless the attachment or lien is being duly contested in good faith by Franchisee, or a petition in bankruptcy is filed by Franchisee, or such 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.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Crown Gold Exchange Franchise Disclosure Document, an Indiana Rider modifies certain provisions of the standard agreement to comply with Indiana law, but it does not specifically define 'good cause' for termination. Instead, it outlines circumstances under which Crown Gold Exchange can terminate the agreement, some with a cure period and some without.
Specifically, Crown Gold Exchange may terminate the agreement with a 10-day cure period if the franchisee fails to make payments when due or lacks sufficient funds for electronic withdrawals. A 30-day cure period applies to breaches not covered in other subsections. However, Crown Gold Exchange can terminate the agreement immediately, without a cure period, if the franchisee misrepresents facts, submits false reports, becomes insolvent, fails to open on time, or loses possession of the location.
Additionally, immediate termination is possible if the franchisee violates laws or confidentiality, engages in prohibited competition, abandons the business for more than five days, slanders Crown Gold Exchange, refuses audits, endangers public health, repeatedly breaches the agreement, has other agreements terminated, is convicted of a felony, or acts in a way that could harm the Crown Gold Exchange brand. These conditions effectively define what Crown Gold Exchange considers 'good cause' for termination, though the term itself isn't explicitly used in the context of Indiana law within the provided excerpts.