Under what conditions can Deka Lash terminate a franchise agreement if the franchisee violates the requirements related to maintaining goodwill?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
Item 17.g. of the Disclosure Document is modified to state that, in addition to the grounds for immediate termination specified in Item 17.h., the franchisor can terminate upon written notice and a 60 day opportunity to cure for a breach of the Franchise Agreement.
Item 17.h. of the Disclosure Document is modified to state that the franchisor can terminate immediately for insolvency, abandonment, mutual agreement to terminate, material misrepresentation, legal violation persisting 10 days after notice, repeated breaches, judgment, criminal conviction, monies owed to the franchisor more than 5 days past due, and imminent danger to public health or safety.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
Based on the 2024 Deka Lash Franchise Disclosure Document, there are specific conditions under which Deka Lash can terminate a franchise agreement. Item 17.g is modified to allow Deka Lash to terminate the agreement if the franchisee breaches the Franchise Agreement, provided they are given written notice and a 60-day opportunity to correct the breach.
Additionally, Item 17.h outlines situations where Deka Lash can terminate the agreement immediately. These include scenarios such as the franchisee's insolvency, abandonment of the business, mutual agreement to terminate, material misrepresentation, legal violations that persist for 10 days after notice, repeated breaches of the agreement, a judgment against the franchisee, a criminal conviction, outstanding monies owed to Deka Lash that are more than 5 days past due, and any situation posing an imminent danger to public health or safety.
It is important for a prospective Deka Lash franchisee to understand these termination conditions, as they define the circumstances under which their franchise agreement could be terminated, potentially resulting in the loss of their investment and business. The modification of Item 17 in the Disclosure Document emphasizes the importance of adhering to the terms of the franchise agreement and maintaining financial and legal compliance.