How many failures to comply with the Golden Krust Caribbean Restaurant agreement are allowed before termination?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
, reproach, scorn, or indignity, or which would negatively impact the goodwill of Franchisor, the Golden Krust System or any Golden Krust Restaurant, or which would constitute an act of moral turpitude. The provisions of this Section survive expiration or termination of this Agreement.
XV. TERMINATION OF AGREEMENT
A. BY YOU
You do not have the right to terminate this Agreement.
B. BY US
We have the right to terminate this Agreement, effective upon delivery of written notice of termination to you, if:
- (1) you (or any of your owners) have made any material misrepresentation or omission in connection with your purchase of the Franchise;
- (2) you (or your Managing Owner) fail to successfully complete initial training to our satisfaction;
- (3) you fail to begin operating the Restaurant within one hundred eighty (180) calendar days after the execution of the Lease Agreement;
- (4) you abandon or fail actively to operate the Restaurant for two (2) or more consecutive business days, unless the Restaurant has been closed for a purpose we have approved or because of casualty or government order;
- (5) you surrender or transfer control of the operation of the Restaurant without our prior written consent;
- (6) you (or any of your owners) are or have been convicted of, or plead or have pleaded no contest to, a felony;
- (7) you (or any of your owners) engage in any dishonest or unethical conduct which may adversely affect the reputation of the Restaurant or other Golden Krust Restaurants or the good will associated with the Marks;
- (8) you (or any of your owners) make an unauthorized assignment of this Agreement or of an ownership interest in you or the Restaurant;
- (9) in the event of your death or disability or the death or disability of the owner of a controlling interest in you, this Agreement or such owner's interest in you is not assigned as herein required;
- (10) you lose the right to possession of the Premises;
- (11) you (or any of your owners) make an unauthorized use or disclosure of any Confidential Information or use, duplicate or disclose any portion of the Brand Standards Manual in violation of this Agreement;
- (12) you violate any health, safety or sanitation law, ordinance or regulation and do not begin to cure the noncompliance or violation immediately, and correct such noncompliance or violation within two (2) hours, after written notice thereof is delivered to you; however, in the event that the franchisor deems the violation an immediate threat to human life, it shall have the authority to immediately close down the restaurant until the situation is contained in its discretion;
- (13) you fail to make payments of any amounts due to us and do not correct such failure within ten (10) days after written notice of such failure is delivered to you;
- (14) you fail to pay when due any federal or state income, service, sales or other taxes due on the operations of the Restaurant, unless you are in good faith contesting your liability of such taxes;
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
The 2024 Franchise Disclosure Document for Golden Krust Caribbean Restaurant does not specify a fixed number of failures to comply with the agreement that would automatically lead to termination. Instead, Golden Krust Caribbean Restaurant retains the right to terminate the agreement if a franchisee breaches the terms.
According to the FDD, Golden Krust Caribbean Restaurant can terminate the agreement, effective immediately upon written notice, for various reasons. These reasons include material misrepresentations during the franchise purchase, failure to complete initial training, not opening the restaurant on time, abandoning the restaurant, transferring control without consent, felony convictions, unethical conduct, unauthorized assignment of the agreement, death or disability of the owner, losing possession of the premises, or unauthorized use of confidential information.
Furthermore, the FDD states that Golden Krust Caribbean Restaurant's failure to exercise any right or insist on compliance with the agreement's terms does not waive their right to demand exact compliance in the future or declare a breach and terminate the agreement. This means that even if Golden Krust Caribbean Restaurant overlooks a violation once, they are not obligated to do so again and can still terminate the agreement for any subsequent breach. Therefore, prospective franchisees should understand that strict adherence to the franchise agreement is crucial, as any single significant breach could lead to termination.