Is a Ledgers franchisee's indictment for a felony grounds for immediate termination?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
We may terminate this Agreement for Cause without notice, and without the opportunity for you to cure. "Cause" means:
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- If you do not attend and pass our Initial Training in accordance with our current passing standards;
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- If you are charged with, indicted for, or convicted of a felony or serious misdemeanor involving moral turpitude;
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- If you violate applicable laws, rules or regulations related to any franchise law, antitrust law, or securities law;
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- If you commit fraud, misappropriation, embezzlement, or unfair and deceptive practices;
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, being indicted for a felony is grounds for immediate termination of the franchise agreement. Specifically, Ledgers can terminate the agreement without notice or an opportunity to cure if a franchisee is charged with, indicted for, or convicted of a felony or serious misdemeanor involving moral turpitude. This is considered "Cause" for termination.
This policy means that a Ledgers franchisee faces significant risk if they are accused of a serious crime. Unlike some franchise systems that may allow a franchisee time to address the issue, Ledgers reserves the right to terminate the agreement immediately upon indictment. This could result in a sudden loss of the business and the initial investment.
It is important for prospective Ledgers franchisees to understand this termination clause and consider its implications. Franchisees should seek legal counsel to fully understand their rights and obligations under the franchise agreement, particularly regarding termination conditions. They should also evaluate their own risk tolerance, considering the potential for immediate termination based on an indictment, even if they are not ultimately convicted of the crime.