Under what conditions can Engineering For Kids terminate the Franchise Agreement with cause?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary * | |
|---|---|---|---|
| Franchise or other Agreement | |||
| c Requirements for you to renew or extend | 2.2 | Notice, satisfaction of monetary obligations, compliance with Franchise Agreement, not in material default, release, sign then-current form of Franchise Agreement (which may contain materially different terms and conditions than the original agreement), pay a renewal fee, and others; please refer to §§ 2.2.1 –2.2.7 in the Franchise Agreement. | |
| d Termination by you | Not applicable | Subject to state law, you may not terminate the Franchise Agreement. | |
| e Termination by us | Not applicable | ||
| without cause | |||
| f Termination by us with cause | 15 | Default under agreement, bankruptcy, abandonment, and other grounds; see § 15 of the Franchise Agreement. (Under the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., we may be unable to terminate the agreement merely because you make a bankruptcy filing.) | |
| g “Cause” defined – | 15.3 | All other defaults not specified in §§ 15.1 and | |
| curable defaults | 15.2 of the Franchise Agreement | ||
| h “Cause” defined – non-curable defaults | 15.1 and 15.2 | Bankruptcy, abandonment, conviction of felony, and others (but under the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., we may be unable to terminate the agreement merely because you make a bankruptcy filing). | |
| i Your obligations on termination/ nonrenewal | 16 | Immediately stop operating the Franchised Business, stop all use of our trademarks, pay all amounts due, pay liquidated damages if termination was due to your default, and others; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 45–48)
What This Means (2025 FDD)
According to Engineering For Kids's 2025 Franchise Disclosure Document, the company can terminate the Franchise Agreement with cause under several conditions, as detailed in Section 15 of the Franchise Agreement. These conditions include default under the agreement, bankruptcy, abandonment, and other grounds. However, the FDD also notes that under the U.S. Bankruptcy Code, Engineering For Kids may be unable to terminate the agreement solely because the franchisee filed for bankruptcy.
The FDD further specifies two categories of "cause" for termination. The first category includes all curable defaults not specified in Sections 15.1 and 15.2 of the Franchise Agreement. The second category consists of non-curable defaults, such as bankruptcy, abandonment, and conviction of a felony. Again, the caveat regarding bankruptcy law applies, potentially limiting Engineering For Kids's ability to terminate the agreement based on bankruptcy alone.
It is important for a prospective Engineering For Kids franchisee to carefully review Section 15 of the Franchise Agreement to fully understand the specific events that could lead to termination with cause. Understanding these conditions is crucial for maintaining compliance and avoiding potential termination of the franchise agreement. Franchisees should also be aware of their obligations upon termination, which include immediately ceasing operation of the Franchised Business, stopping all use of Engineering For Kids's trademarks, paying all amounts due, and paying liquidated damages if the termination was due to their default.