What are Eos Worldwide's 'Step-In Rights' and when can they be exercised?
Eos_Worldwide Franchise · 2025 FDDAnswer from 2025 FDD Document
urse us for our costs and expenses (including the allocation of any internal costs) for such action, plus up to 10% of such costs and expenses as an administrative fee.
- (b) Except in the case of your death or disability which is governed by Section 15.7 hereof, if we determine in our sole judgment that the operation of your Franchise is in jeopardy, or if you are in default under this Agreement, then, in addition to our other remedies, to the fullest extent permitted by applicable law and without waiving your obligations under this Agreement, we may discontinue sales of any products and provision of other services to you, including access to our online training platform and other network components, until you cure the default. In addition, in order to prevent an interruption of the Franchise which would cause harm to the EOS Franchise System and thereby lessen its value, you authorize us to operate your Franchise for as long as we deem necessary and practical, which may include designating another Implementer to provide Implementer Services on your or our behalf, and without waiver of any other rights or remedies which we may have under this Agreement ("Step-In Rights"). In the event of the exercise of the Step-In Rights by us, you agree to hold harmless us, our designees, and our representatives for all actions occurring during the course of such temporary operation except to the extent that you incur losses due to our gross negligence or willful misconduct. You agree to pay all of our reasonable fees and costs incurred as a consequence of our exercise of our Step-In Rights including wages and personnel costs which are payable on demand out of Franchised Business proceeds. Operation of the Franchise during any such period will be on your behalf; provided, that we only have a duty to utilize commercially reasonable efforts and we will not be liable to you for any debts, losses or obligations incurred by the Franchise or to any of your creditors for any products, materials, supplies or services the Franchise purchases during any period it is managed by our appointed manager. Nothing contained herein shall prevent us from exercising any other right, which we may have under this Agreement, including, without limitation, termination.
Source: Item 23 — RECEIPTS (FDD pages 74–246)
What This Means (2025 FDD)
According to the 2025 FDD, Eos Worldwide's 'Step-In Rights' allow them to operate a franchisee's business if they determine its operation is in jeopardy or if the franchisee is in default of the Franchise Agreement. This is intended to prevent interruption of the franchise and protect the Eos Worldwide system's value. Eos Worldwide can exercise these rights to the fullest extent permitted by law without waiving the franchisee's obligations under the agreement. This may include designating another implementer to provide services on behalf of the franchisee or Eos Worldwide.
If Eos Worldwide exercises its Step-In Rights, the franchisee agrees to hold harmless Eos Worldwide and its representatives for actions during this temporary operation, except in cases of gross negligence or willful misconduct by Eos Worldwide. The franchisee is responsible for paying all reasonable fees and costs incurred by Eos Worldwide as a result of exercising these rights, including wages and personnel costs, which are payable on demand from the franchise's proceeds.
The operation of the franchise during this period is on the franchisee's behalf, but Eos Worldwide only has a duty to utilize commercially reasonable efforts. Eos Worldwide is not liable for any debts, losses, or obligations incurred by the franchise or to any of the franchisee's creditors for purchases made during the period it is managed by Eos Worldwide's appointed manager. The FDD states that the exercise of Step-In Rights does not prevent Eos Worldwide from exercising any other rights they have under the agreement, including termination.