What constitutes 'cause' for Management Recruiters to terminate the franchise agreement?

ation by us with cause | Section 20.1, 20.2, 20.3 | | | "Cause" defined – defaults | Section 20.1 | Default of obligations under the franchise agreement which include failure to pay any amounts when due and failure to comply with operational obligations set forth in the franchise agreement or operations manual. | | which can be cured | | |

| "Cause" defined – non- curable | Section 20.2 | Defaults of obligations under the franchise agreement as defined in Sections 20.2 including Franchisee has not generated sufficient Gross Funds to pay a Gross Continuing Fee of at least three thousand dollars ($3,000.00) within six (6) months following the Effective Date; Franchisee is declared bankrupt or judicially determined to be insolvent, or all or a substantial part of the assets of Franchisee or the Franchise Business are assigned to or for the benefit of any creditor, or Franchisee admits his inability to pay Franchisee's debts as they come due; Franchisee abandons the Franchise Business by failing to operate for five (5) consecutive days during which Franchisee is required to operate the Franchise Business under this Agreement's terms, or any shorter period after which it is not unreasonable under the facts and circumstances for Franchisor to conclude that Franchisee does not intend to continue to operate the Franchise Business; Franchisee has made any material misrepresentation relating to acquisition of the Franchise Business or to induce Franchisor to enter into this Agreement; Franchisee engages in conduct that, in Franchisor's sole determination, materially and unfavorably reflects upon the operation and reputation of the Franchise Business or the System; | |-----------------------------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | determination, materially and unfavorably reflects upon the operation and reputation of the Franchise | | | | federal, state, or local Law or regulation applicable to operation of the Franchise Business; after curing any failure described in Section 20.1 Franchisee engages in the same noncompliance, regardless of whether such noncompliance is corrected | | | | after notice; Franchisee repeatedly fails to comply with one or more requirements of this Agreement regardless of whether corrected after notice; | | | | the Franchise Business is seized, taken over or foreclosed by a Governmental Authority in the exercise of such official's duties, or seized, taken over, or foreclosed by a creditor, lien holder or lessor, provided that a final judgment against Franchisee remains unsatisfied for thirty (30) days, unless a supersedes or other appeal bond has been filed; | | | | a levy of execution is made upon the Franchise Business or upon any property used in the Franchise Business and is not discharged within five (5) days after such levy; | | | | Franchisee, or any of its Principals, shareholders, members, officers, directors, or partners is convicted of, or pleads guilty or no contest to, any crime punishable as a felony or involving moral turpitude or immoral conduct; |

| Your obligations on termination/non-renewal | Section 21, | Cease using trademarks, deidentify, cancel assumed name registrations, pay all sums owed immediately, , cease use of domain names and URLs, destroy all tangible copies of Trade Secret materials and delete all electronic copies of Trade Secret materials. Comply with post-termination obligations related to non-solicitation of clients for a period of two (2) years.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 49–54)