Does the Eos Worldwide Franchise Agreement specify that a breach of obligation may result in 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 | Summary | |--------------------------------------------------------|-----------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | 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, the Franchise Agreement specifies that a breach of obligation may result in termination. Specifically, each obligation under the Franchise Agreement is considered a material and essential obligation, and failure to meet these obligations can lead to the termination of the agreement.
The FDD outlines different types of defaults that could lead to termination, categorizing them as either curable or non-curable. Curable defaults allow the franchisee a period to correct the issue after receiving written notice, with the cure period varying depending on the nature of the breach. For instance, failure to remit required monthly payments has a 10-day cure period, while other breaches of obligations, covenants, or representations under the Franchise Agreement have a 30-day cure period. Non-curable defaults, on the other hand, are more severe and do not offer an opportunity for the franchisee to correct the issue.
Examples of non-curable defaults include conviction of a crime of moral turpitude, engaging in misconduct that harms the goodwill or reputation of Eos Worldwide, unauthorized transfer of the Franchised Business, bankruptcy or insolvency, failure to complete required training, breach of in-term restrictive covenants, and making misrepresentations on the franchise application. Additionally, repeated defaults (three or more times) on any material obligations, even if cured, can also be considered a non-curable default. Prospective franchisees should carefully review these conditions to understand what actions could lead to immediate termination of their franchise agreement with Eos Worldwide.