Is there a specific section in the Ledgers Franchise Agreement that discusses termination by the franchisor without cause?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
FDD: Item 17
FA: Section 8
- Item 17 of the Franchise Disclosure Document and Section 8 of the Franchise Agreement permit the Franchisor to terminate the Franchise Agreement without providing the Franchisee ninety (90) days prior notice of the proposed termination or sixty (60) days to cure the deficiency. These provisions are prohibited by the Wisconsin Fair Dealership Law, § 135.04. Accordingly, Item 17 of the Franchise Disclosure Document and Section 8 of the Franchise Agreement are hereby amended to require that prior to the termination of the Franchise Agreement Franchisor must provide Franchisee ninety (90) days written notice of a proposed termination, which states all the reasons for the termination, cancellation, non-renewal or substantive change in circumstances, and the Franchisee shall be given sixty (60) days from the date of delivery or posting of such notice to rectify any claimed deficiency. If the deficiency is rectified within the sixty (60) days the notice shall be void. The notice provisions shall not apply if the reason for termination, cancellation or non-renewal is insolvency, the occurrence of an assignment for the benefit of creditors or bankruptcy. If the reason for termination, cancellation
or non-renewal or substantial change in competitive circumstances is nonpayment of sums due under the Franchise Agreement, Franchisee shall still be entitled to (90) days written notice, as referenced above, however, Franchisee shall only have ten (10) days in which to remedy such default from the date of delivery or post of such notice.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–41)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, Item 17 and Section 8 of the Franchise Agreement address the circumstances under which Ledgers can terminate the Franchise Agreement. However, in Wisconsin, these sections are modified to require Ledgers to provide the franchisee with ninety days' prior written notice of the proposed termination, including the reasons for termination, and sixty days to cure the deficiency. This notice provision does not apply if the termination is due to insolvency, assignment for the benefit of creditors, or bankruptcy. If the termination is due to nonpayment, the franchisee is entitled to ninety days' written notice but only has ten days to remedy the default.
For prospective Ledgers franchisees in Wisconsin, this addendum provides additional protection against termination compared to the standard agreement. It ensures that franchisees have an opportunity to address any issues before the franchise is terminated, except in cases of insolvency or bankruptcy. The shorter cure period for nonpayment defaults highlights the importance of maintaining timely payments to Ledgers.
For franchisees outside of Wisconsin, the standard terms in Item 17 and Section 8 of the Franchise Agreement would apply, which may permit Ledgers to terminate the agreement under certain conditions without the same notice and cure periods. Therefore, it is crucial for prospective franchisees to carefully review Item 17 and Section 8 of the Franchise Agreement to understand the specific termination conditions and their rights in their respective states.