factual

Under what circumstances can Deka Lash terminate the franchise agreement without giving the franchisee an opportunity to cure?

Deka_Lash Franchise · 2024 FDD

Answer from 2024 FDD Document

that the final Franchised Business is required to be opened and operating under the Development Schedule or b) the date you execute a lease for the final Franchised Business required to be opened and operating under the Development Schedule. Upon expiration or termination of this Agreement for any reason, you will not have any rights within the Development Area other than the territorial rights granted in the franchise agreement executed in connection with any Franchised Businesses that you have opened and commenced operating as of the date this Agreement is terminated or expires.

  • 6.2 Termination. Any material violation or breach of any Franchise Agreement or this Agreement will be deemed a material violation of this Agreement and any and all Franchise Agreements between the parties. The non-breaching party will be entitled to enforce the penalties of or to terminate this Agreement or the relevant Franchise Agreement(s) as provided in the relevant Franchise Agreement(s) for enforcement or termination. In addition, Franchisor will have the right, at its option, to terminate this Agreement and all rights granted to Developer hereunder, without affording Developer any opportunity to cure such default, effective upon written notice to Developer, upon the occurrence of any of the following events:
  • a) Cease to Actively Engage. If Developer ceases to actively engage in development activities in the Development Area or otherwise abandons its development business for three (3) consecutive months, or any shorter period that indicates an intent by Developer to discontinue development of the Franchised Businesses within the Development Area;
  • b) Insolvency. If Developer becomes insolvent, meaning unable to pay bills in the ordinary course of business as they become due;

  • c) Failure to Meet Development Schedule.

Source: Item 23 — RECEIPT (FDD pages 63–234)

What This Means (2024 FDD)

According to the 2024 Deka Lash Franchise Disclosure Document, Deka Lash has the right to terminate the agreement and all rights granted to the developer, without providing an opportunity to cure, if certain events occur. These events include if the developer ceases to actively engage in development activities in the Development Area or otherwise abandons its development business for three consecutive months, or any shorter period that indicates an intent by Developer to discontinue development of the Franchised Businesses within the Development Area.

Additionally, Deka Lash can terminate the agreement without an opportunity to cure if the developer becomes insolvent, meaning unable to pay bills in the ordinary course of business as they become due. Deka Lash can also terminate the agreement without an opportunity to cure if the franchisee is convicted of a felony or any other criminal misconduct which is relevant to the operation of the franchise.

Furthermore, Deka Lash can terminate the agreement without an opportunity to cure if the franchisor makes a reasonable determination that continued operation of the franchise by the franchisee will result in an imminent danger to public health or safety. However, Deka Lash may terminate the agreement after sending a notice and a 60-day opportunity to cure for any other breach of the agreement.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.