What happens if a Crown Gold Exchange franchisee fails an inspection?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
Crown Gold Franchising may videotape and/or take photographs of the inspection and the Business.
Crown Gold Franchising may set a minimum score requirement for inspections, and Franchisee's failure to meet or exceed the minimum score will be a default under this Agreement.
Without limiting Crown Gold Franchising's other rights under this Agreement, Franchisee will, as soon as reasonably practical, correct any deficiencies noted during an inspection.
If Crown Gold Franchising conducts an inspection because of a governmental report, customer complaint or other customer feedback, or a default or non-compliance with any System Standard by Franchisee (including following up a previous failed inspection), then Crown Gold Franchising may charge all out-of-pocket expenses plus its then-current inspection fee to Franchisee.
- 11.3 Crown Gold Franchising's Right to Cure. If Franchisee breaches or defaults under any provision of this Agreement, Crown Gold Franchising may (but has no obligation to) take any action to cure the default on behalf of Franchisee, without any liability to Franchisee.
Franchisee shall reimburse Crown Gold Franchising for its costs and expenses (including the allocation of any internal costs) for such action, plus 10% as an administrative fee.
- 11.4 Right to Discontinue Supplies Upon Default. While Franchisee is in default or breach of this Agreement, Crown Gold Franchising may (i) require that Franchisee pay cash on delivery for products or services supplied by Crown Gold Franchising, (ii) stop selling or providing any products and services to Franchisee, and/or (iii) request any third-party vendors to not sell or
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Crown Gold Exchange Franchise Disclosure Document, failing to meet or exceed the minimum score requirement on an inspection constitutes a default under the Franchise Agreement. Crown Gold Exchange may videotape and/or take photographs of the inspection and the business. The franchisee is expected to correct any deficiencies noted during the inspection as soon as reasonably practical.
If an inspection is conducted due to a governmental report, customer complaint, customer feedback, or a default or non-compliance with any System Standard, including following up on a previous failed inspection, Crown Gold Exchange may charge the franchisee for all out-of-pocket expenses plus its then-current inspection fee. Crown Gold Exchange also has the right, but not the obligation, to cure any default on behalf of the franchisee without any liability. The franchisee must then reimburse Crown Gold Exchange for all costs and expenses incurred, including a 10% administrative fee.
Furthermore, while a franchisee is in default or breach of the Franchise Agreement, Crown Gold Exchange may require cash on delivery for products or services, stop selling or providing any products and services, and/or request third-party vendors to not sell or provide products or services to the franchisee. These actions do not constitute a breach or constructive termination of the agreement, and the franchisee remains obligated under the agreement.