Can a Flowerama franchisee terminate the agreement for a cause not under the franchisor's direct control?
Flowerama Franchise · 2024 FDDAnswer from 2024 FDD Document
You specifically acknowledge and agree that prior to becoming a Flowerama franchisee, you had no experience, information or knowledge whatsoever about the operation of Flowerama retail sales outlets or a Franchised Business and that your knowledge of the Confidential Information was obtained solely from us, following your training by us and your subsequent operation of the Center under this Agreement. Therefore, commencing on the termination or expiration of this Agreement for any reason, including a sale or assignment by you or the expiration or termination of the sublease or main lease, other than due to a breach of this Agreement by us, which is not cured after proper notice thereof, you shall not own or operate or have any interest, whether direct or indirect, including without limitation, as owner, partner, shareholder, director, officer or employee, or guarantor or surety, in the
ownership or operation of any other competing business specializing in or featuring the same or substantially similar merchandise or services ("Competitive Business") located at the Center or within a radius of ten (10) miles of the Center, or any other existing Flowerama Center, for a period of two (2) years from the date of termination or expiration of this Agreement, or from the date of assignment or transfer by you.
Source: Item 23 — RECEIPTS (FDD pages 77–300)
What This Means (2024 FDD)
According to Flowerama's 2024 Franchise Disclosure Document, a franchisee can terminate the agreement if Flowerama breaches the agreement and fails to cure the breach after receiving proper notice. Specifically, the franchisee's ability to operate a competing business after the agreement ends is impacted by the reason for termination.
If the agreement is terminated or expires for any reason, including a sale or assignment by the franchisee or the expiration or termination of the sublease or main lease, the franchisee is restricted from owning or operating a competing business. This restriction applies at the Flowerama Center location or within a 10-mile radius of the Center or any other existing Flowerama Center for two years from the termination or expiration date.
However, this restriction does not apply if the termination is due to a breach of the Franchise Agreement by Flowerama that is not cured after proper notice. In that specific case, the franchisee would not be subject to the non-compete provisions regarding future business ventures. This provides an important protection for franchisees if Flowerama fails to uphold its end of the agreement.