If a Devon Creek franchisee terminates the agreement without cause, what is the consequence?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.1 Franchisee's Obligations. Upon termination or expiration of this Agreement, all rights and licenses granted hereunder to Franchisee shall immediately terminate and Franchisee and each Principal shall:
- 18.1.1 immediately cease to operate the Franchised Business, and shall not thereafter, directly or indirectly identify himself, herself or itself as a current Devon Creek owner, franchisee or licensee;
- 18.1.2 immediately and permanently cease to use the Marks, any imitation of any Mark, Franchisor's copyrighted material or other intellectual property, confidential or proprietary material or indicia of the Franchised Business, or use any trade name, trade or service mark or other commercial symbol that suggests a current or past association with Franchisor, Licensor, or the System. In particular, Franchisee shall cease to use, without limitation, all signs, billboards, advertising materials, displays, stationery, forms and any other articles, which display the Marks;
- 18.1.3 take such action as may be necessary to cancel any assumed name or equivalent registration that contains the Mark or any other service mark or trademark of Franchisor, and Franchisee shall furnish Franchisor with evidence of compliance with this obligation which is satisfactory to Franchisor, within ten (10) days after termination or expiration of this Agreement;
- 18.1.4 promptly pay all sums owing to Franchisor and its affiliates. Such sums shall include all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of any default by Franchisee. The payment obligation herein shall give rise to and remain, until paid in full, a lien in favor of Franchisor against any and all of the personal property, furnishings, equipment,
fixtures, and inventory or other business assets owned by Franchisee at the time of default;
18.1.5 pay to Franchisor all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor in connection with obtaining any remedy available to Franchisor for any violation of this Agreement and, subsequent to the termination or expiration of this Agreement, in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement that survive its termination;
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
The 2024 Devon Creek Franchise Disclosure Document outlines the franchisee's obligations upon termination or expiration of the agreement. If a franchisee terminates the agreement, they must immediately cease operating the franchised business and cannot identify themselves as a current Devon Creek owner, franchisee, or licensee. They are also prohibited from using Devon Creek's trademarks, copyrighted material, or any intellectual property.
Furthermore, the franchisee must cancel any assumed name registrations that contain Devon Creek's trademarks and provide evidence of compliance to Devon Creek within ten days of termination or expiration. The franchisee is also responsible for promptly paying all sums owed to Devon Creek and its affiliates, including damages, costs, and expenses, such as reasonable attorney's fees, resulting from any default by the franchisee. This payment obligation creates a lien in favor of Devon Creek against the franchisee's personal property, furnishings, equipment, fixtures, inventory, or other business assets.
Additionally, the franchisee is liable for all damages, costs, and expenses, including reasonable attorney's fees, incurred by Devon Creek in obtaining any remedy for violations of the agreement. This includes seeking injunctive or other relief to enforce any provisions of the agreement that survive its termination. These post-termination obligations are typical in franchise agreements to protect the brand and ensure a smooth transition.