How long does a Ledgers franchisee have to fail to pay suppliers before it constitutes a non-curable default?

The 2025 Ledgers Franchise Disclosure Document (FDD) specifies conditions under which Ledgers can terminate the Franchise Agreement with or without an opportunity for the franchisee to cure the default.

According to the FDD, Ledgers may terminate the agreement without providing an opportunity to cure if the franchisee becomes "insolvent, meaning unable to pay your bills in the ordinary course as they become due". This implies that if a Ledgers franchisee is unable to pay their bills as they become due, it is considered a non-curable default, leading to potential termination of the agreement by Ledgers.

In contrast, if any amount owing to Ledgers from the franchisee is more than 30 days past due, Ledgers may terminate the agreement, but only if the franchisee fails to pay within thirty (30) days after receiving notice and an opportunity to cure. This distinction highlights that failure to pay suppliers (insolvency) is treated more severely than being late on payments to the franchisor itself. A prospective franchisee should clarify with Ledgers the specific documentation or evidence required to demonstrate solvency and what recourse they have if a temporary cash flow problem leads to a default notice.