Under what circumstances can either party terminate the agreement related to Dq Treat?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
month, for so long as this Participation Agreement is in effect.
- 3.2 Fee Adjustments. Program Fees are subject to adjustment if necessary to pass through any increases or decreases in costs associated with the Program. Any such adjustment resulting in an increase in cost associated with Program Fees shall become effective upon thirty (30) days notice to Participating Franchisee or Sub-Franchisee.
- 4 Term. The "Term" begins when the Participation Agreement is signed by the parties and continues for so long as the Agreement is in effect, provided, however, that to the extent GIFT is required to provide commercially reasonable
support services following a termination of the Agreement, the provisions of this Participation Agreement shall remain in effect, but only to the extent necessary for GIFT to perform such services and for Operated Locations, Participating Franchisee or Sub- Franchisee to fulfill its obligations in connection with such services. Notwithstanding anything herein to the contrary, Participating Franchisee or Sub-Franchisee has the right to terminate this Participation Agreement, without cause and without any penalty fee, upon no less than sixty (60) days' prior written notice to GIFT, with a copy of such notice to Client.
5 Termination for Cause.
- Either party has the right to terminate this Participation Agreement immediately in the event that the other party is guilty of a material breach of this Participation Agreement, and such breach remains uncured thirty (30) days following receipt of notice thereof. GIFT will provide a copy of such notice of termination to Client.
- GIFT may terminate this Participation Agreement upon notice to Operated Locations, Participating 5.2 Franchisee or Sub-Franchisee: (i) if Operated Locations, Participating Franchisee or Sub-Franchisee or the Program causes GIFT to violate any law or regulation and Operated Locations, Participating Franchisee or Sub-Franchisee or Client fails to cure the condition causing such violation within ten (10) business days after notice; (ii) if Operated Locations, Participating Franchisee or Sub-Franchisee fails to pay any amount due within ten (10) days after receipt of notice; (iii) if GIFT determines, in its sole discretion, that a material adverse change has occurred in the financial condition of Operated Locations, Participating Franchisee or Sub-Franchisee; (iv) in whole or in part, in one or more jurisdictions, if the ACH Settlement Services cause GIFT or its Affiliated Processor to violate any law or regulation and Operated Locations, Participating Franchisee or Sub-Franchisee or Client fails to cure the condition causing such violation within ten (10) business days after notice; (v) if GIFT is informed that Operated Locations, Participating Franchisee or Sub-Franchisee no longer operates as a franchisee of Client; or (vi) if Client instructs GIFT in writing to immediately terminate the Participation Agreement. GIFT will provide a copy of such notice of termination to Client.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to the 2025 Dq Treat Franchise Disclosure Document, either party can terminate the Participation Agreement immediately if the other party materially breaches the agreement and fails to correct the breach within 30 days of receiving notice. GIFT (likely a third-party service provider) must provide a copy of the termination notice to the Client (presumably Dq Treat).
GIFT can also terminate the Participation Agreement with notice if the franchisee or sub-franchisee causes GIFT to violate a law or regulation, and the issue isn't resolved within ten business days after notice. GIFT can terminate if the franchisee or sub-franchisee fails to pay amounts due within ten days after notice, or if GIFT determines there's a material adverse change in the franchisee's financial condition. GIFT can terminate the agreement if the ACH Settlement Services cause GIFT or its Affiliated Processor to violate any law or regulation, and the franchisee or Client fails to resolve the issue within ten business days after notice. GIFT can also terminate if informed that the franchisee no longer operates as a franchisee of Client or if Client instructs GIFT in writing to immediately terminate the Participation Agreement. GIFT's service obligations are suspended during the cure periods for violations of laws or regulations.
Additionally, either party can terminate the Participation Agreement immediately if the other party goes into liquidation, receivership, bankruptcy, or sells substantially all of its assets. Termination or expiration of the main agreement automatically terminates the Participation Agreement without needing any notice. Furthermore, either party may terminate the Agreement in writing with 30 days' prior notice if the other party materially breaches its obligations and fails to remedy the breach within that 30-day period.
For a prospective Dq Treat franchisee, it's crucial to understand these termination conditions, as they outline the circumstances under which the franchise agreement can be prematurely ended. Failure to meet financial obligations, comply with regulations, or maintain the financial stability of the business can lead to termination. Similarly, franchisees should be aware of their rights to terminate the agreement if Dq Treat fails to meet its obligations. Understanding these conditions is vital for assessing the risks and responsibilities associated with the franchise.