If a Focus Cfo franchisee is charged with a felony, can Focus CFO terminate the agreement?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
Focus CFO has the right to terminate this Agreement effective immediately for cause upon written notice to Franchisee specifying the particulars of the circumstances forming the basis for cause.
For purposes of this Agreement, "Cause" is defined as: (i) Franchisee becomes insolvent; (ii) Franchisee files a petition in bankruptcy; (iii) Franchisee makes an assignment for the benefit of its creditors; (iv) Franchisee takes action or inaction that defames or disparages Focus CFO; (v) Franchisee engages in any act of dishonesty, misrepresentation, material neglect of duty, or willful misconduct in connection with the performance of Franchisee's duties or responsibilities required pursuant to this Agreement; (vi) Franchisee engages in any behavior that caused physical, mental or emotional harm to an individual or property or behavior which is coercive, threatening, abusive, exploitive, harassing (including sexual, verbal or physical harassment) or which is otherwise inappropriate in a workplace or professional environment; (vii) Franchisee makes any unauthorized use of the Focus CFO Marks or unauthorized use or disclosure of any confidential information of Focus CFO; (viii) Franchisee engages in or is accused of the commission of an act or omission constituting or involving fraud, embezzlement or other crime which could affect the reputation of Focus CFO, the Focus CFO System or the Focus CFO Marks or Franchisee is charged with or indicted for a felony, or convicted of a misdemeanor offense involving moral turpitude; or (ix) Franchisee fails to comply with any applicable federal, state or local regulations or laws relating to the Franchise, the CFO Services or Focus CFO's business.
Source: Item 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
According to Focus Cfo's 2025 Franchise Disclosure Document, Focus CFO can terminate the franchise agreement immediately if a franchisee is charged with a felony. This falls under the definition of "Cause" for termination. The written notice to the franchisee must specify the particulars of the circumstances forming the basis for cause.
This means that even being charged with a felony, not just convicted, is grounds for immediate termination. This is a significant risk for franchisees, as legal proceedings can be lengthy and impact their ability to operate the franchise, even if they are ultimately found not guilty. The FDD also states that Focus CFO can terminate the agreement if the franchisee engages in or is accused of the commission of an act or omission constituting or involving fraud, embezzlement or other crime which could affect the reputation of Focus CFO, the Focus CFO System or the Focus CFO Marks or Franchisee is charged with or indicted for a felony, or convicted of a misdemeanor offense involving moral turpitude.
It is important for prospective franchisees to understand the broad scope of what constitutes "Cause" for termination and to seek legal counsel to fully understand their rights and obligations under the franchise agreement. Franchisees should also maintain adequate insurance coverage to protect themselves against potential legal liabilities. This clause is not uncommon in franchise agreements, as franchisors seek to protect their brand and reputation from damage caused by franchisee misconduct.