Under what conditions can Endless Summer Sweets charge a non-compliance fee?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
- (xiii) Franchisee or any Owner is charged with, pleads guilty or no-contest to, or is convicted of a felony; or
(xiv) Franchisee or any Owner is accused by any governmental authority or third party of any act, or if Franchisee or any Owner commits any act or series of acts, that in Franchisor's opinion is reasonably likely to materially and unfavorably affect the Endless Summer Sweets brand.
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)
Based on the 2024 Endless Summer Sweets Franchise Disclosure Document, the franchisor can terminate the franchise agreement, which may result in fees, if the franchisee or any owner is charged with, pleads guilty or no-contest to, or is convicted of a felony. Additionally, Endless Summer Sweets can terminate the agreement if the franchisee or any owner is accused by any governmental authority or third party of any act, or if the franchisee or any owner commits any act or series of acts, that in the Franchisor's opinion is reasonably likely to materially and unfavorably affect the Endless Summer Sweets brand.
Termination of the franchise agreement requires the franchisee to fulfill several obligations immediately, including paying all amounts owed to the franchisor and returning all copies of the manual, confidential information, and any other materials related to the business operation. The franchisee must also notify relevant entities about the termination of their right to use any numbers, addresses, domain names, or listings associated with the Endless Summer Sweets marks and authorize their transfer to the franchisor or a new franchisee.
Furthermore, within 30 days of termination or expiration, the franchisee is responsible for de-identifying the location at their own expense, ensuring it no longer contains the marks, signage, or any trade dress of an Endless Summer Sweets business, to the franchisor's reasonable satisfaction. These post-termination obligations, including those related to non-competition, confidentiality, indemnity, and dispute resolution, remain in effect even after the agreement ends.