Is losing possession of the location a curable default for an Endless Summer Sweets franchise?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise | Summary |
|---|---|---|
| or other agreement | ||
| If you sign a Multi-Unit Development | ||
| Agreement, 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-- | Non-payment by you (10 days to cure); violate | |
| curable defaults | ||
| franchise agreement other than non-curable | ||
| default (30 days to cure). | ||
| h. “Cause” defined--non- | FA: Misrepresentation when applying to be a | |
| curable defaults | ||
| 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; | ||
| conviction of, or plea to a felony, or | ||
| commission or accusation of an act that is | ||
| reasonably likely to materially and unfavorably | ||
| affect our brand; any other breach of franchise | ||
| agreement which by its nature cannot be cured. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 30–34)
What This Means (2024 FDD)
According to the 2024 Endless Summer Sweets Franchise Disclosure Document, losing possession of your location is considered a non-curable default. This means that if an Endless Summer Sweets franchisee loses the rights to their business location, the franchisee does not have an opportunity to correct the situation and prevent termination of the franchise agreement.
Other non-curable defaults for Endless Summer Sweets include misrepresentation when applying to be a franchisee, knowingly submitting false information, bankruptcy, violation of law, violation of confidentiality, violation of non-compete, violation of transfer restrictions, slander or libel of Endless Summer Sweets, refusal to cooperate with their business inspection, ceasing operations for more than 5 consecutive days, three defaults in 12 months, cross-termination, conviction of, or plea to a felony, or commission or accusation of an act that is reasonably likely to materially and unfavorably affect their brand, and any other breach of franchise agreement which by its nature cannot be cured.
In contrast, Endless Summer Sweets does allow a period to cure defaults for non-payment (10 days) and for violating the franchise agreement in ways other than the non-curable defaults (30 days). The distinction between curable and non-curable defaults is important for prospective franchisees to understand, as it defines the circumstances under which they have an opportunity to rectify a breach of contract and maintain their franchise agreement.