Under what conditions can Crown Gold Exchange unilaterally terminate a franchise in Indiana?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
ent and fails to cure or to make substantial progress toward curing the violation within 30 days after receiving written notice from Franchisee detailing the alleged default. Termination by Franchisee is effective 10 days after Crown Gold Franchising receives written notice of termination.
14.2 Termination by Crown Gold Franchising.
- (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;
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 Exchange can terminate the Franchise Agreement under certain conditions, potentially without allowing the franchisee an opportunity to cure the issue. These conditions include if the franchisee misrepresented or omitted material facts when applying to become a franchisee, or if they breach any representation made in the agreement. Termination without a cure period is also possible if the franchisee knowingly submits false reports or provides false information to Crown Gold Exchange.
Crown Gold Exchange can also terminate the agreement without a cure period if a receiver or trustee is appointed for the business or the franchisee's property, or if the franchisee makes a general assignment for the benefit of creditors. Further reasons for immediate termination include the franchisee's inability to pay debts, a levy or execution against the business, or an attachment or lien remaining on the business for 30 days (unless contested in good faith). Filing for bankruptcy, or having a bankruptcy petition filed against them that is not dismissed within 45 days, also constitutes grounds for termination without opportunity to cure.
Additional causes for termination without a cure period include failing to open the business by the date specified in the Summary Page, losing possession of the business location, or committing certain violations of the agreement. These violations include non-compliance with laws, breaches of confidentiality or non-compete agreements, or unauthorized transfers of the franchise. Franchisees should note that Crown Gold Exchange also has grounds for termination if the franchisee abandons the business for more than five consecutive days, slanders or libels Crown Gold Exchange or its employees, refuses to cooperate with audits or inspections, or operates the business in a way that poses a significant danger to health or safety without rectifying the issue within 48 hours.
Crown Gold Exchange can also terminate the agreement if the franchisee receives two or more notices of default within a 12-month period and commits another breach. Termination of any other agreement between Crown Gold Exchange (or its affiliates) and the franchisee (or affiliates) due to a breach of that agreement can also trigger termination of the franchise agreement. Finally, Crown Gold Exchange may terminate the agreement if the franchisee or any owner is charged with, pleads guilty to, or is convicted of a felony, or if they are accused of any act that could materially and unfavorably affect the Crown Gold Exchange brand.