What section of the Gokhale Method franchise agreement discusses the franchisee's obligations on termination or non-renewal?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
| PROVISION | SECTIONIN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| a.Lengthofthefranchiseterm | Section3.1 | Thetermisfive(5)years. |
| b.Renewalorextension | Section3.2 | You may have the right to renew for consecutive terms of five (5) years subjecttocertainconditions(e.g.,thatyousign anewformoffranchiseagreement). |
| c.Requirementsforfranchiseeto reneworextend | Section3.2 | You must give written notice of your decision to renew no fewer thanthreemonthsnormorethan12monthspriortothe end of the then-current term. You mayalsohavetoexecutea general release in our favor and signanewformoffranchise agreement. |
| d.Terminationbyfranchisee | None | |
| e.Terminationbyfranchisorwithout | None | |
| cause | ||
| f.Terminationbyfranchisorwith cause | Section15 | We may terminate for cause. Depending on the reason for termination, we may not provide you an opportunity tocure. Seethisitem17(g)and(h)forfurtherdescription. |
| g.“Cause”defined–curabledefaults | Section15.3 | You have 30 days to cure any default not enumerated in Section15.1andSection15.2. |
| h.“Cause”defined–non-curable defaults | Section15.1and Section15.2 | We may terminate the Franchise Agreement without providing you an opportunity to cure for any of the deficiencies identified in Sections 15.1 or 15.2 of the FranchiseAgreement. |
| i.Franchisee’sobligationson termination/non-renewal | Section16 | Cease operations, cease use of confidential information and trademarks, assign your lease to us (at our option), pay all sums owed tousandouraffiliates,payliquidateddamagesto us, if applicable, return manuals and confidential information, sell us your equipment (at our option), and complywithcovenantsnottocompete. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 27–29)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, Section 16 of the franchise agreement outlines the franchisee's obligations upon termination or non-renewal. These obligations include ceasing operations, discontinuing the use of confidential information and trademarks, and assigning the lease to Gokhale Method if they choose.
Additionally, the franchisee is required to pay all outstanding sums owed to Gokhale Method and its affiliates, as well as any applicable liquidated damages. They must also return all manuals and confidential information. If Gokhale Method exercises its option, the franchisee must sell their equipment to them.
Finally, the franchisee must adhere to the covenants not to compete, which restrict their involvement in any competitive business. These obligations are standard in franchise agreements to protect the franchisor's brand and proprietary information, and to ensure a smooth transition upon termination or non-renewal.