Under what circumstances would a Dq Treat franchisee's defaults be considered non-curable, leading to termination?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise agreement | Summary |
|---|---|---|
| h. "Cause" defined - non curable defaults | Section 13.1 Section 13.2(C) | Lose right to occupy premises; failure to reopen after restaurant is destroyed or damaged; failure to reopen after relocation; abandonment; insolvency; conviction of an offense related to restaurant; intentionally understating or underreporting amounts due; third default within 12 months; you are named a specially designated national or blocked person as designated by the United States Department of the Treasury's Office of Foreign Assets Control. |
Source: Item 16 — UItem 16U***:** U**Restrictions on What the Franchisee May Sell (FDD pages 51–55)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, certain defaults by a franchisee are considered non-curable, which can lead to the termination of the franchise agreement. These non-curable defaults include situations where the franchisee loses the right to occupy the premises, fails to reopen the restaurant after it has been destroyed or damaged, or fails to reopen after relocation.
Additional non-curable defaults include abandonment of the restaurant, insolvency, conviction of an offense related to the restaurant, intentionally understating or underreporting amounts due to Dq Treat, or incurring a third default within a 12-month period. Furthermore, if the franchisee is named a specially designated national or blocked person by the United States Department of the Treasury's Office of Foreign Assets Control, this is also considered a non-curable default.
These conditions are outlined in Sections 13.1 and 13.2(C) of the franchise agreement. Prospective franchisees should carefully review these sections to understand the full scope of actions that could lead to termination without an opportunity to correct the issue. Understanding these terms is crucial for maintaining a healthy franchise relationship and avoiding potential pitfalls that could jeopardize the business.