Under what conditions can either party terminate the Dq Treat agreement early?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
11.2 Early Termination. Either party may terminate this Agreement in writing upon 30 days' prior notice to the other party if the other party is in material breach of any of its obligations under this Agreement and such party fails to remedy the breach within such 30-day period.
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 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.
Either party may also terminate this Participation Agreement immediately in the event that the other 5.3 party shall go into liquidation, suffer the appointment of a receivership of its assets, go into bankruptcy, voluntarily or involuntarily, or otherwise take advantage of any insolvency laws, or upon any voluntary or involuntary sale, transfer, or other disposition of substantially all of the assets of the other party.
Termination of Agreement.
Termination or expiration of the Agreement results in immediate termination of this Participation Agreement with no notice required.
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 FDD, either party can terminate the agreement early if the other party materially breaches the agreement. The terminating party must provide written notice 30 days in advance, giving the breaching party time to remedy the breach. If the breach is not remedied within that 30-day period, the agreement can be terminated.
Additionally, GIFT (likely a third-party service provider) has specific termination rights under the Participation Agreement. GIFT can terminate the agreement immediately if the franchisee's operations or the program itself causes GIFT to violate any law or regulation, and the franchisee fails to correct the issue within ten business days after notice. GIFT can also terminate if the franchisee fails to pay any amount due within ten days after notice, or if GIFT determines that there has been a material adverse change in the franchisee's financial condition. Further, GIFT can terminate if the ACH Settlement Services cause GIFT or its Affiliated Processor to violate any law or regulation, and the franchisee fails to cure the condition causing such violation within ten business days after notice. GIFT can also terminate if they are 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.
Furthermore, either party may terminate the Participation Agreement immediately if the other party goes into liquidation, suffers the appointment of a receivership of its assets, goes into bankruptcy (voluntarily or involuntarily), or otherwise takes advantage of any insolvency laws, or upon any voluntary or involuntary sale, transfer, or other disposition of substantially all of the assets of the other party. Termination or expiration of the Agreement results in immediate termination of this Participation Agreement with no notice required.
These termination conditions are typical in franchise agreements, as they protect both the franchisor and franchisee from material harm or instability. However, the specific conditions related to GIFT highlight the importance of understanding all related agreements and third-party relationships when entering into a franchise agreement.