What constitutes a non-curable default that could lead to termination of a Crown Gold Exchange franchise agreement?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise | Summary |
|---|---|---|
| or other agreement | ||
| not give us the right to terminate your franchise | ||
| agreement. However, if your franchise | ||
| agreement is terminated, we have the right to | ||
| terminate your MUDA. | ||
| g. “Cause” defined-- | Non-payment by you (10 days to cure); violate | |
| curable defaults | ||
| franchise agreement other than non-curable | ||
| default (30 days to cure). | ||
| h. “Cause” defined--non- | FA: Misrepresentation when applying to be a | |
| curable defaults | ||
| franchisee; knowingly submitting false | ||
| information; bankruptcy; lose possession of | ||
| your location; violation of law; violation of | ||
| confidentiality; violation of non-compete; | ||
| violation of transfer restrictions; slander or | ||
| libel of us; refusal to cooperate with our | ||
| business inspection; cease operations for more | ||
| than 5 consecutive days; three defaults in 12 | ||
| months; cross-termination; | ||
| conviction of, or plea to a felony, or | ||
| commission or accusation of an act that is | ||
| reasonably likely to materially and unfavorably | ||
| affect our brand; any other breach of franchise | ||
| agreement which by its nature cannot be cured. | ||
| MUDA: failure to meet development schedule; | ||
| violation of franchise agreement or other | ||
| agreement which gives us the right to terminate | ||
| it. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 29–33)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, there are several actions that constitute a non-curable default, which means the franchisor can terminate the franchise agreement without giving an opportunity to correct the issue. These include misrepresentation when applying to become a franchisee or knowingly submitting false information.
Other non-curable defaults for Crown Gold Exchange include bankruptcy, losing possession of the business location, violating any law, violating confidentiality agreements, violating non-compete agreements, violating transfer restrictions, or slandering or libeling Crown Gold Exchange. Refusing to cooperate with business inspections, ceasing operations for more than five consecutive days, or having three defaults within 12 months also constitute non-curable defaults.
Additionally, being convicted of or pleading to a felony, or committing or being accused of an act that could negatively impact the Crown Gold Exchange brand can lead to termination. Any breach of the franchise agreement that cannot be cured by its nature is also considered a non-curable default. For Multi-Unit Development Agreements (MUDA), failure to meet the development schedule or violating the franchise agreement or any other agreement that gives Crown Gold Exchange the right to terminate it are also non-curable defaults.