Does the Gokhale Method franchise agreement allow for any cure period for certain defaults?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.1. Automatic Termination. You shall be deemed to be in default under this Agreement, and all rights granted to you herein shall automatically terminate without notice to you or opportunity to cure, if one or more of the following occur: You become insolvent or make a general assignment for the benefit of creditors; a petition in bankruptcy is filed by you or such a petition is filed against and not opposed by you; you are adjudicated bankrupt or insolvent; a bill in equity or other proceeding for the appointment of a receiver of you or other custodian for your business or assets is filed and consented to by you; a receiver or other custodian (permanent or temporary) of your assets or property, or any part thereof, is appointed by any court of competent jurisdiction; proceedings for a composition with creditors under any state or federal law should be instituted by or against you; a final judgment remains unsatisfied or of record for thirty (30) days or longer (unless supersedes bond is filed); you are dissolved; you die or are declared incompetent; execution is levied against your business or property; suit to foreclose any lien or mortgage against the Location or equipment is instituted against you and not dismissed within thirty (30) days; you attempt to transfer this Franchise Agreement or more than half the assets of the Franchised Business; you delegate teaching of the Gokhale System without our prior written consent; or the real or personal property of the Franchised Business shall be sold after levy thereupon by any sheriff, marshal, or constable.
- 15.2. Notice Without Opportunity to Cure. Additionally, upon the occurrence of any of the following events of default, we may, at our option, terminate this Agreement and all rights granted hereunder, without affording you any opportunity to cure, effective immediately upon notice to you:
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, the franchise agreement outlines specific conditions for default and termination, distinguishing between situations allowing for no cure period and those that automatically terminate the agreement.
The Gokhale Method franchise agreement stipulates that certain defaults result in automatic termination without notice or opportunity to cure. These include scenarios such as insolvency, bankruptcy, assignment for the benefit of creditors, or the appointment of a receiver. Additionally, if a final judgment remains unsatisfied for thirty days, or if the franchisee attempts to transfer the agreement or delegates teaching without written consent, the agreement automatically terminates.
In other instances, Gokhale Method retains the option to terminate the agreement immediately upon notice, without providing an opportunity to cure. The FDD does not specify what these instances are, but a prospective franchisee should seek clarification from Gokhale Method regarding the specific events that would trigger termination without an opportunity to cure, to fully understand their obligations and potential risks under the franchise agreement.