What is the cure period for non-payment by a Desi District franchisee before termination for cause?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| e. Termination by | Not Applicable | |
| franchisor without cause | ||
| f. Termination by franchisor with cause | FA: § 14.2 MUDA: § 4 | We may terminate your agreement for cause, subject to any applicable notice and cure opportunity. If you sign a Multi-Unit Development Agreement, termination of your MUDA does not give us the right to terminate your franchise agreement. However, if your franchise agreement is terminated, we have the right to terminate your MUDA. |
| g. "Cause" defined curable defaults | FA: § 14.2 MUDA: none | Non-payment by you (10 days to cure); violate franchise agreement other than non-curable default (30 days to cure); operate in a manner dangerous to health or safety (48 hours to cure). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 44–48)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, a franchisee has a 10-day cure period if the cause for termination is non-payment. This means that if a Desi District franchisee fails to make required payments, they have 10 days from the date of notice to correct the non-payment. If the franchisee cures the non-payment within this 10-day period, Desi District cannot terminate the franchise agreement for that particular instance of non-payment.
This cure period is relatively short compared to cure periods for other violations of the franchise agreement. For example, if a franchisee violates the franchise agreement in a way that isn't a non-curable default, they have 30 days to cure the violation. If a franchisee operates in a manner dangerous to health or safety, they have 48 hours to cure.
It is important for prospective Desi District franchisees to understand the specific conditions that trigger termination for cause and the corresponding cure periods. Failing to address a default within the allotted time can result in the termination of the franchise agreement and the loss of the business. Franchisees should ensure they have systems in place to manage payments and address any potential defaults promptly to avoid termination.