What happens if a receiver or trustee is appointed for a Crown Gold Exchange business?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
- (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:
- (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;
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, Crown Gold Franchising can terminate the franchise agreement without allowing an opportunity to cure if a receiver or trustee is appointed by any court for the business or substantially all of the franchisee's property.
This no-cure termination clause also applies if the franchisee makes a general assignment for the benefit of creditors, is unable to pay debts as they become due, or faces a levy or execution against the business. Similarly, if an attachment or lien remains on the business for 30 days (unless contested in good faith), or if the franchisee files for bankruptcy, or if a bankruptcy petition is filed against the franchisee and not dismissed within 45 days, Crown Gold Franchising can terminate the agreement immediately.
This means a Crown Gold Exchange franchisee needs to maintain a solid financial standing to avoid immediate termination of the franchise agreement. Franchisees should be aware of these conditions and seek legal counsel to fully understand the implications of financial distress on their franchise agreement.