If an Endless Summer Sweets franchisee defaults, what costs are they responsible for?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
14.3 Effect of Termination. Upon termination or expiration of this Agreement, all obligations that by their terms or by reasonable implication survive termination, including those pertaining to non-competition, confidentiality, indemnity, and dispute resolution, will remain in effect, and Franchisee must immediately:
(i) pay all amounts owed to Franchisor;
(ii) return to Franchisor all copies of the Manual, Confidential Information and any and all other materials provided by Franchisor to Franchisee or created by a third party for Franchisee relating to the operation of the Business, and all items containing any Marks, copyrights, and other proprietary items; and delete all Confidential Information and proprietary materials from electronic devices;
(iii) notify the telephone, internet, email, electronic network, directory, and listing entities of the termination or expiration of Franchisee's right to use any numbers, addresses, domain names, locators, directories and listings associated with any of the Marks, and authorize their transfer to Franchisor or any new franchisee as may be directed by Franchisor, and Franchisee hereby irrevocably appoints Franchisor, with full power of substitution, as its true and lawful attorney-in-fact, which appointment is coupled with an interest; to execute such directions and authorizations as may be necessary or appropriate to accomplish the foregoing; and
(iv) cease doing business under any of the Marks.
14.4 Remove Identification. Within thirty (30) days after termination or expiration of this Agreement, Franchisee shall at its own expense "de-identify" the Location so that it no longer contains the Marks, signage, or any trade dress of an Endless Summer Sweets business, to the reasonable satisfaction of Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 39–125)
What This Means (2024 FDD)
According to the 2024 Endless Summer Sweets Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, a franchisee is responsible for several immediate actions and payments. The franchisee must pay all outstanding amounts owed to Endless Summer Sweets. They are also required to return all copies of the operations manual, confidential information, and any other materials provided by Endless Summer Sweets, including items containing trademarks, copyrights, and proprietary information. Additionally, all confidential and proprietary materials must be deleted from electronic devices.
Furthermore, the franchisee must notify all relevant entities, such as telephone, internet, email, and directory services, about the termination of their right to use any numbers, addresses, domain names, directories, or listings associated with Endless Summer Sweets' trademarks. They must authorize the transfer of these assets to Endless Summer Sweets or a new franchisee, and they irrevocably appoint Endless Summer Sweets as their attorney-in-fact to execute these transfers.
Within 30 days of termination or expiration, the franchisee is responsible for de-identifying the location at their own expense. This involves removing all Endless Summer Sweets trademarks, signage, and trade dress to the reasonable satisfaction of Endless Summer Sweets. These obligations ensure that the franchisee ceases all operations under the Endless Summer Sweets brand and returns all associated assets and information to the franchisor, while also preventing any continued association with the brand after termination.