Under what conditions can Deka Lash immediately terminate a franchise agreement in California?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
CALIFORNIA ADDENDUM TO THE FRANCHISE AGREEMENT
If any of the terms of the Franchise Agreement are inconsistent with the terms below, the terms below control
Sections 10.2 and 10.3 are deleted and in their place are substituted the following:
10.2 Termination by Us Without Right to Cure. We may terminate this Agreement without notice and the opportunity to cure for any of the following reasons:
(a) The franchisee or the business to which the franchise relates has been judicially determined to be insolvent, all or a substantial part of the assets thereof are assigned to or for the benefit of any creditor, or the franchisee admits his or her inability to pay his or her debts as they come due:
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the California Addendum modifies the standard termination clauses, specifying conditions under which Deka Lash can terminate the Franchise Agreement without notice or an opportunity to cure. These conditions include the franchisee or the business being judicially determined insolvent, assigning a substantial part of its assets for the benefit of creditors, or admitting inability to pay debts as they become due. This modification replaces Sections 10.2 and 10.3 of the standard agreement.
This means that if a Deka Lash franchisee in California faces severe financial distress to the point of insolvency or assignment of assets, Deka Lash has the right to immediately terminate the franchise agreement. This is a stricter standard than requiring a notice and cure period, which is common in many franchise agreements for less severe breaches.
Prospective franchisees in California should be aware of these specific termination conditions, as they differ from the standard agreement and could result in immediate loss of the franchise under certain financial circumstances. It is important to maintain financial stability and seek professional advice if facing financial difficulties to avoid potential immediate termination by Deka Lash.