What constitutes a material breach of the Eos Worldwide Franchise Agreement that could lead to termination?
Eos_Worldwide Franchise · 2025 FDDAnswer from 2025 FDD Document
| f. | 17.2-17.3 | | Termination by franchisor | | Each of your obligations under the Franchise Agreement is a material | | with cause | | and essential obligation, the breach of which may result in | | | | termination. | | Provision | Section in Franchise Agreement | |--------------------------------------------------------|-----------------------------------------| | g. "Cause" defined – curable defaults | 17.3 | You have 30 days from our written notice to cure breaches of obligations, covenants or representations under the Franchise Agreement that are subject to cure, except that the following breaches provide a shorter time period specified in the Franchise Agreement: (i) you failed to timely remit the required monthly payments (10 days from our written notice); (ii) you fail to remit any other payments when due to us or our affiliates (payments (10 days from our written notice); (iii) you fail to remit any payments immediately when due to a supplier, vendor, broker, landlord, or other third party owed by the Franchised Business payments (30 days from our written notice); (iv) you make any unauthorized use of the Marks or violate the Intellectual Property provisions of the Franchise Agreement (5 business days from our written notice); (v) you fail to maintain proper insurance (5 business days from our written notice); (vi) you fail to pay your other debts or expenses (15 days from our written notice); or (vii) you fail to meet the minimum performance requirements (e.g., number of sessions, attendance at QCEs and ratings) and fail to meet those requirements with the participation in required remedial training (with | | h. "Cause" defined – non- curable defaults | 17.2 | at least a 30-day period to cure). Non-curable defaults include: (i) you are convicted of a crime of moral turpitude or theft; (ii) you engage in any misconduct or become involved in any situation or occurrence which actually hurts (or may hurt) the goodwill or reputation of EOS or the EOS Franchise System in a material manner or that otherwise brings you, us, our affiliates, or another EOS Implementer or any of our respective businesses into actual or potential public disrepute, contempt, scandal, or ridicule, or information becomes public of such conduct by you in the past; (iii) you make any unauthorized transfer of the Franchised Business or Franchise Agreement; (iv) your bankruptcy or insolvency; (v) you fail to successfully complete Boot Camp or other required training; (vi) you fail to meet the minimum performance requirements (e.g., number of sessions, attendance at QCEs and ratings) and fail to participate in required remedial training; (vii) you breach your in- term restrictive covenants; (viii) you knowingly fail to accurately report other payments due to us, our affiliates, or suppliers/creditors, or you commit any acts of fraud or misrepresentation; (ix) you default, on three (3) or more separate occasions within any term of your franchise, on any of your material obligations to us or an affiliate, whether or not cured (including failure to adhere to any of our Core Values); (x) you fail to commence business within the time prescribed in the Franchise Agreement; (xi) you fail to pay any taxes when due; or (xii) you make any misrepresentation on your franchise application or supporting documentation.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 54–59)
What This Means (2025 FDD)
According to the 2025 Eos Worldwide Franchise Disclosure Document, each obligation under the Franchise Agreement is considered material and essential, meaning a breach can result in termination. Eos Worldwide distinguishes between curable and non-curable defaults.
Curable defaults allow a franchisee a period to remedy the breach after written notice. The cure period varies: 30 days for most breaches, but only 10 days for failing to remit monthly payments or other payments to Eos Worldwide or its affiliates. Unauthorized use of marks or violating intellectual property provisions, along with failure to maintain proper insurance, have a cure period of only 5 business days. Failure to pay other debts or expenses allows 15 days to cure. Failure to meet minimum performance requirements can be cured with required remedial training, with at least a 30-day period to cure.
Non-curable defaults, which lead to immediate termination, include convictions of crimes involving moral turpitude or theft, engaging in misconduct that harms Eos Worldwide's goodwill or reputation, unauthorized transfer of the franchise, bankruptcy or insolvency, and failure to complete required training. Other non-curable defaults include breaching in-term restrictive covenants, knowingly failing to accurately report payments, committing fraud or misrepresentation, defaulting on material obligations three or more times (whether cured or not), failing to commence business on time, failing to pay taxes when due, and making misrepresentations on the franchise application.