Under what circumstances can a Devon Creek franchisee seek termination of 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 Devon Creek's 2024 Franchise Disclosure Document, a franchisee can terminate the Franchise Agreement without cause. However, the document also outlines various circumstances under which Devon Creek may terminate the agreement with notice to the franchisee. These include failing to obtain necessary licenses and permits, not opening the franchised business within the required timeframes, falsifying reports to Devon Creek, ceasing operations for 15 or more consecutive days, violating applicable laws, underreporting Gross Revenue, not complying with insurance and indemnification requirements, attempting unauthorized transfers of the franchise, and misrepresenting or omitting material facts in the franchise application.
Additional reasons for termination by Devon Creek include convictions or no contest pleas to felonies that could harm the brand's reputation, adverse judgments involving fraud or similar claims, concealing revenues or maintaining false books, creating public health or safety threats, refusing inspections or audits, unauthorized use of trademarks or confidential information, breaches of non-competition covenants, repeated defaults, defaults under other agreements with Devon Creek, insufficient funds for checks or EFTs, and failure to meet Minimum Performance Standards.
It is important to note that some defaults, such as insolvency, bankruptcy, written admission of inability to pay debts, receivership, levy, composition with creditors, unsatisfied final judgment for more than fifteen (15) days, or undisclosed foreclosure proceedings, result in automatic termination of the Franchise Agreement without notice. Furthermore, the agreement will terminate automatically upon the franchisee's death or permanent disability unless the franchise is transferred to an approved replacement within three months, if not prohibited by law.