Under what circumstance regarding bankruptcy might the termination provisions in the Face Foundrie Franchise Agreement not be enforceable?

According to Face Foundrie's 2025 Franchise Disclosure Document, the Franchise Agreement allows Face Foundrie to terminate the agreement if a franchisee declares bankruptcy. However, this termination provision may not be enforceable under federal bankruptcy law, specifically 11 U.S.C. Sections 101 et seq. Face Foundrie states that it will enforce the provision to the extent that it is enforceable. This information is reiterated in addenda required by California, Maryland, and Hawaii.

This means that while Face Foundrie has included a clause allowing them to terminate the franchise agreement if you file for bankruptcy, federal law might override this clause, preventing them from doing so. However, Face Foundrie explicitly states that they will attempt to enforce the clause as much as legally possible.

Bankruptcy laws are designed to protect individuals and businesses facing financial hardship, so this provision reflects a balance between the franchisor's interests and the legal protections afforded to franchisees. Prospective franchisees should consult with a legal professional to understand their rights and obligations under both the franchise agreement and federal bankruptcy law.