Under what conditions can Golden Krust Caribbean Restaurant terminate the franchise agreement with cause?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
ted agreements. You should read these provisions in the agreements attached to this Disclosure Document.**
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| (a) Length of the | Section I.D. | 10 years |
| Franchise Term | ||
| (b) Renewal or Extension | Section I.E. | One (1) additional 10 year term. |
| of the term | ||
| (c) Requirements for Franchisee to renew or extend | Section I.E. | Not in default of any agreement with us and paid all monetary obligations. Right to maintain possession of premises or secure substitute premises. Remodel or renovate to our satisfaction. Give timely notice. Sign general release (Exhibit H includes the current form). Execute our then-current franchise agreement which may contain materially different terms and conditions from your original franchise agreement and pay renewal fee. |
| (d) Termination by | Section XV.A. | You do not have the right to terminate the |
| Franchisee | Agreement. | |
| (e) Termination by | Not Applicable | |
| franchisor without | ||
| cause | ||
| (f) Termination by | Section XV.B. | We can terminate only if you commit one of |
| Franchisor with cause | several violations. | |
| (g) "Cause" defined curable defaults | Section XV.B. | You have 2 hours to cure health, safety or sanitation law violations; 10 days to cure monetary defaults; 30 days to cure other defaults not listed in Section XV.B. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 27–29)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the company can terminate the franchise agreement with cause if the franchisee commits certain violations. These violations are categorized into non-curable defaults and curable defaults.
Non-curable defaults, as detailed in Section XV.B, include actions such as failing to complete the initial training program, not opening the restaurant within 180 days of the agreement, abandoning the restaurant, engaging in unapproved transfers of the franchise, making material misrepresentations to Golden Krust Caribbean Restaurant, being convicted of a felony, or engaging in dishonest or unethical conduct. Additional non-curable defaults include losing access to the premises, unauthorized use or disclosure of the Brand Standards Manual or confidential information, failure to pay taxes, repeated defaults (even if cured previously), making an assignment for the benefit of creditors, having a trustee or receiver appointed to manage the business, or selling a competitor's products at the Golden Krust Caribbean Restaurant location.
For curable defaults, Golden Krust Caribbean Restaurant provides an opportunity for the franchisee to correct the issue within a specified timeframe. Franchisees have 2 hours to cure violations of health, safety, or sanitation laws. They have 10 days to cure monetary defaults, such as failure to make required payments to Golden Krust Caribbean Restaurant. For other defaults not specifically listed as non-curable, the franchisee has 30 days to correct the issue. If the franchisee fails to cure the default within the given time frame, Golden Krust Caribbean Restaurant has grounds to terminate the franchise agreement.