What is the cure period allowed for defaults under agreements between the Developer/Affiliates and Ella Cafe/Affiliates?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
pay any amounts for which Franchisor has advanced funds for or on Developer's behalf, or upon which Developer is acting as guarantor of Developer's obligations.
- 9.4. Termination With 30-Day Cure Period. Except as otherwise provided in this Section 9., Franchisor has the right to terminate this Agreement, which termination will become effective upon delivery of written notice of termination, if Developer fails to cure any curable default within 30 days after delivery of written notice.
- 9.5. Termination Related to Death or Permanent Incapacity. Franchisor has the right to terminate this Agreement if an approved transfer as required by Section 8.8. is not effected within the designated time frame following a permanent disability.
- 9.6. Cross-Default. Any default under any agreement between Developer or its Affiliates and Franchisor or its Affiliates, which Developer or its Affiliates fail to cure within any applicable cure period, will be considered a default under this Agreement and will provide an independent basis for termination of this Agreement.
- 9.7. Additional Remedies. If Developer is in default of this Agreement, in lieu of termination as provided for in Sections 9.2., 9.3., and 9.4., Franchisor may, in its sole discretion, elect to reduce the number of Coffee Houses Developer has the right to establish pursuant to the Development Schedule and or modify the size of the Development Area. If Franchisor elects to exercise the remedy set forth above, Developer will continue to develop Coffee Houses in accordance with its rights and obligations under this Agreement, as modified. Franchisor's exercise of its remedy under this Section 9.7. will not constitute a waiver by Franchisor to exercise Franchisor's option to terminate this Agreement at any time with respect to a subsequent event of default of a similar or different nature.
10. COVENANTS
- 10.1. Noncompetition During Term of Agreement. Developer and each Owner acknowledge that Developer and each Owner will receive valuable, specialized training and Confidential Information, including, without limitation, information regarding the operational, sales, promotional, and marketing methods and techniques and trade secrets of Developer and the System. Developer and each Owner covenant and agree that during the Term of this Agreement, except as otherwise approved in writing by Franchisor, Developer and, if applicable, such Owner, will not, either directly or indirectly, for themselves, or through, on behalf of, or in conjunction with any person, or legal entity:
- 10.1.1.
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, any default under any agreement between the Developer or its Affiliates and Ella Cafe or its Affiliates, must be cured within the applicable cure period. If the default is not cured within that time, it will be considered a default under the Development Agreement, providing an independent basis for termination.
Ella Cafe offers different cure periods depending on the nature of the default. For instance, if a developer fails to pay amounts due to Ella Cafe or its affiliates, fails to pay trade creditors, or fails to pay amounts for which Ella Cafe has advanced funds, the developer has 10 days after written notice to cure the default. For any other curable default, Ella Cafe provides a 30-day cure period after written notice.
However, certain defaults allow Ella Cafe to terminate the agreement immediately without any opportunity to cure. These include failing to adhere to the Development Schedule, conviction of a felony, any transfer or attempted transfer that violates the agreement, failure to comply with confidentiality or noncompetition covenants, material misrepresentations in the application, or receiving three or more written notices of default within a 12-month period.