What is the cure period for an Ella Cafe franchisee's violation of the franchise agreement (other than a non-curable default)?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or | Summary |
|---|---|---|
| other agreement | ||
| If you sign a MUDA, you may terminate | ||
| it at any time. | ||
| e. Termination by | None None | |
| franchisor without cause | ||
| f. Termination by | We may terminate your agreement for | |
| franchisor with cause | ||
| cause, subject to any applicable notice | ||
| and cure opportunity. | ||
| If you sign a MUDA, termination of | ||
| your MUDA does not give us the right | ||
| to terminate your franchise agreement. | ||
| However, if your franchise agreement is | ||
| terminated, we have the right to | ||
| terminate your MUDA. | ||
| g. “Cause” defined-- curable defaults | FA: Section 14.3, 14.4 | Non-payment by you (10 days to cure); violate franchise agreement other than non-curable default (30 days to cure). Non-payment by you (10 days to cure); |
| MUDA: Article 9 | violate franchise agreement other than | |
| non-curable default (30 days to cure). | ||
| h. “Cause” defined-- | FA: Section 14.1, 14.2 | FA: Misrepresentation when applying to |
| non-curable defaults | ||
| MUDA: Article 4, 9 | be a franchisee; knowingly submitting | |
| false information; bankruptcy; lose | ||
| possession of your location; violation of | ||
| law; violation of confidentiality; | ||
| violation of non-compete; violation of | ||
| transfer restrictions; slander or libel of | ||
| us; refusal to cooperate with our | ||
| business inspection; cease operations for | ||
| more than 5 consecutive days; three | ||
| defaults in 12 months; cross-termination; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 41–45)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, a franchisee has 30 days to cure a violation of the franchise agreement, provided the default is curable. This cure period applies to violations other than those categorized as 'non-curable defaults.' The franchise agreement outlines specific defaults that are considered non-curable, which would lead to immediate termination without an opportunity to rectify the situation.
This 30-day cure period offers Ella Cafe franchisees a chance to correct operational or contractual issues before the franchisor terminates the agreement. It is important to note that this cure period does not apply to non-curable defaults, which include actions like misrepresentation during the application process, bankruptcy, loss of location possession, violation of laws, confidentiality, or non-compete agreements, and other breaches that cannot be remedied.
It is essential for prospective Ella Cafe franchisees to understand the distinction between curable and non-curable defaults, as outlined in Sections 14.1, 14.2, 14.3, and 14.4 of the Franchise Agreement and Article 4 and 9 of the MUDA. Paying close attention to these provisions can help franchisees avoid actions that could lead to immediate termination and ensure they have the opportunity to address any curable violations within the specified timeframe.