Under what circumstances can Endless Summer Sweets terminate the franchise agreement with cause?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise | Summary |
|---|---|---|
| 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. | ||
| MUDA: failure to meet development schedule; | ||
| violation of franchise agreement or other | ||
| agreement which gives us the right to terminate | ||
| it. | ||
| f. Termination by | We may terminate your agreement for cause, | |
| franchisor with cause | subject to any applicable notice and cure opportunity. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 30–34)
What This Means (2024 FDD)
According to Endless Summer Sweets' 2024 Franchise Disclosure Document, the company can terminate the franchise agreement with cause, subject to any applicable notice and cure opportunity. The grounds for termination are divided into curable and non-curable defaults.
Curable defaults include non-payment, where the franchisee has 10 days to cure the default, and violating any other term of the franchise agreement, where the franchisee has 30 days to cure the default.
Non-curable defaults include misrepresentation when applying to be a franchisee, knowingly submitting false information, bankruptcy, losing possession of the location, violating any law, violating confidentiality or non-compete agreements, violating transfer restrictions, slandering or libeling Endless Summer Sweets, refusing to cooperate with business inspections, ceasing operations for more than 5 consecutive days, incurring three defaults within 12 months, cross-termination, conviction of or pleading to a felony, or committing an act that could negatively affect the brand. Any other breach of the franchise agreement that cannot be cured also constitutes a non-curable default. If the franchisee has a Multi-Unit Development Agreement (MUDA), failure to meet the development schedule or violating the franchise agreement or other agreement that gives Endless Summer Sweets the right to terminate it also constitutes a non-curable default.