Besides termination, what other remedies does Ella Cafe have if a franchisee defaults?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
elated to Death or Permanent Incapacity**. Franchisor has the right to terminate this Agreement if an approved transfer as required by Section 15 is not effected within the designated time frame following a permanent disability.
- 14.6. Cross-Default. Any default under any agreement between Franchisee or its Affiliates on the one hand and Franchisor or its Affiliates on the other hand, which are not cured within any applicable cure period, will be considered a default under this Agreement and will provide an independent basis for termination of this Agreement.
- 14.7. Additional Remedies. In addition to, or in lieu of, termination of this Agreement, in its sole discretion, Franchisor may require the Coffee House to be closed during any cure period relating to a default based on public health and safety concerns.
- 14.8 Termination by Franchisee. Franchisee may terminate this Agreement only if Ella Coffee House violates a material provision of this Agreement and fails to cure or to make substantial progress toward curing the violation within 30 days after receiving written notice from Franchisee detailing the alleged default. Termination by Franchisee is effective 10 days after Ella Coffee Company receives written notice of termination.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, besides termination of the franchise agreement, Ella Cafe has additional remedies if a franchisee defaults. Ella Cafe has the discretion to require the Coffee House to be closed during any cure period relating to a default based on public health and safety concerns.
In cases where a franchisee is unable or unwilling to resolve a customer complaint within 48 hours, and Ella Cafe reimburses a customer to settle the complaint, the franchisee must promptly reimburse Ella Cafe for the expended amounts. This obligation survives any termination or expiration of the agreement.
Additionally, any default under any agreement between the franchisee or its affiliates and Ella Cafe or its affiliates, which is not resolved within the applicable cure period, is considered a default under the Franchise Agreement. This provides an independent basis for Ella Cafe to terminate the agreement.