Can Face Foundrie terminate the Area Development Agreement without cause?

According to Face Foundrie's 2025 Franchise Disclosure Document, the ability of Face Foundrie to terminate the Area Development Agreement without reasonable cause is restricted in Virginia. An addendum for Virginia states that it is unlawful for Face Foundrie to cancel a franchise without reasonable cause, according to Section 13.1-564 of the Virginia Retail Franchising Act. The addendum further clarifies that if any grounds for default or termination stated in the franchise agreement or development agreement do not constitute "reasonable cause" as defined by the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable. This protection applies specifically within the Commonwealth of Virginia, indicating that the standard terms of the Area Development Agreement may be superseded by state law to protect franchisees.

This addendum serves as an important safeguard for prospective Face Foundrie area developers in Virginia, ensuring that their agreement cannot be terminated arbitrarily. The inclusion of this clause acknowledges the legal protections afforded to franchisees under Virginia law, which aims to prevent franchisors from unfairly terminating agreements without justification. This provision helps to balance the relationship between Face Foundrie and its area developers, providing a level of security and recourse against unwarranted termination.

For prospective area developers in Virginia, this addendum offers a significant benefit by aligning the termination terms with the state's legal standards for reasonable cause. It means that Face Foundrie must have a legitimate and justifiable reason for terminating the agreement, as defined by Virginia law, rather than relying on potentially broad or ambiguous clauses within the standard agreement. This protection can provide peace of mind and encourage investment, knowing that the agreement is less susceptible to arbitrary cancellation. However, it is important to note that this protection is specific to Virginia, and area developers in other states may not have the same level of safeguard against termination without cause.