What happens if a Focalpoint Coaching franchisee makes an assignment for the benefit of creditors?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
- (18) Franchisee makes an assignment for the benefit of creditors or admits in writing Franchisee's insolvency or inability to pay Franchisee's debts generally as they become due; Franchisee consents to the appointment of a receiver, trustee, or liquidator of all or the substantial part of Franchisee's property; the real or personal property of the Franchised Business is attached, seized, subjected to a writ or distress warrant, or levied upon, unless the attachment, seizure, writ, warrant, or levy is vacated within thirty (30) days; or any order appointing a receiver, trustee, or liquidator of Franchisee or the Franchised Business is not vacated within thirty (30) days following the order's entry;
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, a franchisee's assignment for the benefit of creditors can trigger specific consequences under the franchise agreement. Specifically, if a Focalpoint Coaching franchisee makes an assignment for the benefit of creditors, this constitutes a breach of the franchise agreement.
In addition to assigning assets for the benefit of creditors, other actions can trigger a breach. These include admitting in writing an insolvency or inability to pay debts as they become due, consenting to the appointment of a receiver, trustee, or liquidator for the franchisee's property, or having the Franchised Business's real or personal property attached, seized, or levied upon, unless such actions are vacated within thirty days. Similarly, the failure to vacate an order appointing a receiver, trustee, or liquidator within thirty days of its entry also constitutes a breach.
These stipulations are fairly standard in franchise agreements, as they protect the franchisor's brand and system standards by ensuring franchisees remain solvent and capable of meeting their financial obligations. A prospective Focalpoint Coaching franchisee should understand these conditions and their potential ramifications before entering into the agreement.