If a Face Foundrie franchisee files for bankruptcy, can Face Foundrie immediately terminate the agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
14.02 Termination by Franchisor without a Cure Period. Franchisor may immediately terminate this Agreement upon written notice to Franchisee, without opportunity to cure, if:
(a) Franchisee files a petition under any bankruptcy or reorganization law, becomes insolvent, or has a trustee or receiver appointed by a court of competent jurisdiction for all or any part of its property;
(b) Franchisee seeks to effect a plan of liquidation, reorganization, composition or arrangement of its affairs, whether or not the same shall be subsequently approved by a court of competent jurisdiction; it being understood that in no event shall this Agreement or any right or interest hereunder be deemed an asset in any insolvency, receivership, bankruptcy, composition, liquidation, arrangement or reorganization proceeding;
(c) Franchisee has an involuntary proceeding filed against it under any bankruptcy, reorganization, or similar law and such proceeding is not dismissed within sixty (60) days thereafter;
(d) Franchisee makes a general assignment for the benefit of its creditors;
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, Face Foundrie can immediately terminate the franchise agreement if the franchisee files for bankruptcy. Specifically, Face Foundrie can terminate the agreement with written notice and without an opportunity for the franchisee to cure the breach if the franchisee files a petition under any bankruptcy or reorganization law, becomes insolvent, or has a trustee or receiver appointed for their property.
Additionally, Face Foundrie can terminate the agreement immediately if the franchisee seeks to effect a plan of liquidation, reorganization, composition, or arrangement of its affairs, regardless of whether it's approved by a court. The agreement explicitly states that the franchise agreement or any rights within it will not be considered an asset in any insolvency, receivership, bankruptcy, composition, liquidation, arrangement, or reorganization proceeding.
Furthermore, Face Foundrie can immediately terminate the agreement if an involuntary proceeding is filed against the franchisee under any bankruptcy, reorganization, or similar law, and such proceeding is not dismissed within 60 days. Face Foundrie can also terminate the agreement if the franchisee makes a general assignment for the benefit of its creditors. This means that a Face Foundrie franchisee needs to be aware of these conditions, as any of these events could lead to immediate termination of their franchise agreement without an opportunity to correct the situation.