Under what circumstances does the Area Developer agreement with Face Foundrie automatically terminate due to insolvency?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
6.1.1 Area Developer becomes insolvent or makes a general assignment for the benefit of creditors;
6.1.2 a petition in bankruptcy is filed by Area Developer or such a petition is filed against and not opposed by Area Developer;
6.1.3 Area Developer is adjudicated a bankrupt or insolvent; if a bill in equity or other proceeding for the appointment of a receiver of Area Developer or other custodian for Area Developer's business or assets is filed and consented to by Area Developer; if a receiver or other custodian (permanent or temporary) of Area Developer's assets or property, or any part thereof, is appointed by any court of competent jurisdiction;
6.1.4 proceedings for a composition with creditors under any state or federal law should be instituted by or against Area Developer;
Source: Item 23 — RECEIPTS (FDD pages 74–257)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the Area Development Agreement can automatically terminate if the Area Developer becomes insolvent. Specifically, the agreement terminates automatically under the following conditions:
First, the agreement terminates if the Area Developer becomes insolvent or makes a general assignment for the benefit of creditors. Second, termination occurs if a bankruptcy petition is filed by the Area Developer, or if such a petition is filed against the Area Developer and not opposed. Third, the agreement ends if the Area Developer is adjudicated bankrupt or insolvent, or if a receiver is appointed for the Area Developer's business or assets with the Area Developer's consent.
Additionally, the agreement terminates automatically if proceedings for a composition with creditors are instituted by or against the Area Developer under any state or federal law. These conditions outline the specific insolvency-related events that trigger an immediate termination of the Area Development Agreement with Face Foundrie.