What constitutes a curable default that could lead to termination of a Lees Famous Recipe franchise?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise agreement | Summary | |
|---|---|---|---|
| c. | Requirements for franchisee to renew or extend | 3 | Provide advance notice, not be in default within the 24 months preceding the expiration of the initial term, comply with current Franchise Agreement, satisfactorily complete any new/refresher training programs, sign a new agreement (which may contain materially different terms and conditions than your original Franchise Agreement), remodel, provide proof you will maintain possession of the Restaurant premises and remodel the Restaurant as necessary to comply with our then-current standards and specifications, pay a renewal fee, and sign a general release of claims. |
| d. | Termination by franchisee | None | Not applicable. |
| e. | Termination by franchisor without cause | None | Not applicable. |
| f. | Termination by franchisor with | 15(A) through | We may terminate the Franchise Agreement only if |
| cause | (C) | you default. | |
| g. | "Cause" defined – curable defaults | 15(C) | Failure to conform to the material requirements of the System or the material standards as described in the Operations Manual or as we have established under the System; failure to timely pay any obligations or liabilities due and owing to us or our affiliates; violation of any material provision or obligation of the Franchise Agreement; and other breaches The cure period is generally 30 days |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 54–59)
What This Means (2025 FDD)
According to Lees Famous Recipe's 2025 Franchise Disclosure Document, several actions can be considered curable defaults that could lead to the termination of the Franchise Agreement. These curable defaults include failing to conform to the material requirements of the System or the material standards described in the Operations Manual, or as established under the System. Additionally, failure to timely pay any obligations or liabilities due to Lees Famous Recipe or its affiliates, and violating any material provision or obligation of the Franchise Agreement also constitute curable defaults.
For a prospective Lees Famous Recipe franchisee, understanding these curable defaults is crucial. It means that if a franchisee fails to meet the brand's operational standards, doesn't pay their dues on time, or violates any significant part of the franchise agreement, Lees Famous Recipe has grounds to terminate the agreement, but the franchisee generally has 30 days to correct the issue. This cure period allows the franchisee an opportunity to rectify the situation and avoid termination.
It's important to note that the cure period is generally 30 days. Franchisees should pay close attention to the Operations Manual and the Franchise Agreement to fully understand what is expected of them and how to avoid these defaults. Maintaining open communication with Lees Famous Recipe can also help in addressing any potential issues before they escalate to the point of default.
In the franchise industry, it is common for franchisors to outline both curable and non-curable defaults in their franchise agreements. Curable defaults provide franchisees with an opportunity to correct their mistakes, while non-curable defaults typically lead to immediate termination. Understanding the distinction between these types of defaults is essential for any prospective franchisee.