Does the Devon Creek Franchise Agreement give the franchisee the right to terminate the agreement?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
Section in Franchise Provision Agreement Summary h. "Cause" defined - non-curable Sections 17.1 and The Franchise Agreement will terminate I defaults 17.2 automatically, without notice for the following derdans 17.2 defaults: insolvency; bankruptcy; written admission of inability to pay debts; receivership; levy; composition with creditors; unsatisfied final judgment for more than fifteen (15) days; or foreclosure proceeding that is not disclosed within fifteen (15) days. We may terminate the Franchise Agreement upon notice to you if you: do not obtain required licenses and permits and/or open the Franchised Business within required time frames; falsify any report to us; fail to operate for a period of fifteen (15) consecutive days or more; fail to comply with applicable laws; understate Gross Revenue; fail to comply with insurance and indemnification requirements; attempt a transfer in violation of the Franchise Agreement; fail, or your legal representative fails to transfer as required upon your death or permanent disability; misrepresent or omit a material fact in applying for the Franchise; are convicted or plead no contest to a felony or crime that could damage the goodwill or reputation of the Marks or the System; receive an adverse judgment in any proceeding involving allegations of fraud, racketeering or improper trade practices or similar claim that could damage the goodwill or reputation of the Marks or the System; conceal revenues or maintain false books; create a threat or danger to public health or safety; refuse an inspection or audit by us; use the Marks, copyrighted material or Confidential Information in an unauthorized manner; make an unauthorized disclosure of Confidential Information; fail to comply with non-competition covenants; default in the performance of your obligations two (2) or more times during the term or receive two (2) or more default notices in any 12-month period regardless if they were timely cured; default under any other agreement with us or our affiliate; have insufficient funds to honor a check or EFT two (2) or more times within any twelve (12)-month period; fails to meet Minimum Performance Standards; or terminate the Franchise Agreement without _ cause.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 37–42)
What This Means (2024 FDD)
According to the 2024 Devon Creek Franchise Disclosure Document, the Franchise Agreement will terminate automatically, without notice, under certain conditions related to defaults. These non-curable defaults include insolvency, bankruptcy, a written admission of inability to pay debts, receivership, levy, composition with creditors, an unsatisfied final judgment for more than fifteen (15) days, or a foreclosure proceeding that is not disclosed within fifteen (15) days.
Devon Creek may terminate the Franchise Agreement upon notice to the franchisee if the franchisee does not obtain required licenses and permits, or open the Franchised Business within the required time frames. Additional causes for termination by Devon Creek include falsifying any report to them, failing to operate for a period of fifteen (15) consecutive days or more, failing to comply with applicable laws, understating Gross Revenue, failing to comply with insurance and indemnification requirements, or attempting a transfer in violation of the Franchise Agreement.
More causes for termination by Devon Creek include failure to transfer as required upon death or permanent disability, misrepresentation or omission of a material fact in applying for the Franchise, conviction or pleading no contest to a felony or crime that could damage the goodwill or reputation of the Marks or the System, receiving an adverse judgment in any proceeding involving allegations of fraud, racketeering or improper trade practices or similar claim that could damage the goodwill or reputation of the Marks or the System, concealing revenues or maintaining false books, creating a threat or danger to public health or safety, refusing an inspection or audit by Devon Creek, using the Marks, copyrighted material or Confidential Information in an unauthorized manner, making an unauthorized disclosure of Confidential Information, failing to comply with non-competition covenants, defaulting in the performance of obligations two (2) or more times during the term or receiving two (2) or more default notices in any 12-month period regardless if they were timely cured, defaulting under any other agreement with Devon Creek or their affiliate, having insufficient funds to honor a check or EFT two (2) or more times within any twelve (12)-month period, failing to meet Minimum Performance Standards, or terminating the Franchise Agreement without cause. It is important to note that the franchisee terminating the Franchise Agreement without cause is itself grounds for termination by Devon Creek.
Prospective franchisees should carefully review the entire Item 17 in the Franchise Disclosure Document and the specific termination provisions in the Franchise Agreement with their legal counsel to fully understand their rights and obligations regarding termination. Understanding these conditions is crucial for making an informed decision about investing in a Devon Creek franchise.