What legal grounds allow a franchisee to terminate the My Salon Suite agreement?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
rate each Additional Franchised Business by entering into Franchisor's then-current franchise agreement for each Additional Franchised Business on or before the respective Franchise Agreement Execution Deadline set forth in the Development Schedule. All Additional Franchised Business developed under this Agreement shall be established and operated pursuant to Additional Franchise Agreements.
- 6.3 Notwithstanding any statement in any of the Additional Franchise Agreements to the contrary, the parties agree that the Initial Franchised Business and the Additional Franchised Businesses must be opened in accordance with the following schedule ("Development Schedule"):
| Franchised | Franchise Agreement | Required Lease Execution | Required Opening | |
|---|---|---|---|---|
| Business | Execution Deadline | Date | Date | |
| 1 | Date of execution of this | 9 months from signing the | 18 monthsfrom signing | |
| Agreement | Initial Franchise Agreement | the Initial Franchise Agreement | ||
| 2 | ||||
| 3 | ||||
| - 6.4 Failure by you to adhere to the Development Schedule, including execution of each Addition Franchise Agreement in accordance with the Development Schedule, shall constitute a material breach under this Agreement and Franchisor may terminate this Agreement upon notice. Upon termination of this Agreement, any (i) remaining option rights you must open Additional Franchised Businesses under this Agreement, or (ii) territorial protection in the Development Area, will be terminated as well without any refund of any portion of the Development Fee. This Agreement will automatically terminate upon Franchisee's opening of the last Additional Franchised Business granted pursuant to this Agreement. |
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- Conditions for Exercising Franchisee's Option. To exercise Franchisee's option for Franchised Businesses after Franchisee's Initial Franchised Business, you must satisfy the following conditions as Franchisor may determine in its sole discretion:
- 7.1. You must not be in default of this Agreement, Franchisee's Initial Franchise Agreement, any Additional Franchise Agreement, or other any other agreement between you and Franchisor, and must have fully performed all Franchisee's material obligations under these agreements throughout their respective terms;
- 7.2 You must have opened Franchisee's Initial Franchised Business and, if appropriate, all subsequent Franchised Businesses, within the time periods prescribed in the Development Schedule;
- 7.3 Neither this Agreement, nor any of the franchise agreements you previously entered into with Franchisor may have expired or been terminated for any reason;
- 7.4 You have timely paid any fees or other monies due Franchisor as and when due under the terms of the Initial Franchise Agreement or any other agreement with Franchisor;
Source: Item 23 — RECEIPTS (FDD pages 95–230)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, a My Salon Suite franchisee does not have explicit legal grounds to terminate the franchise agreement. However, the franchisor, Suite Management Franchise, LLC, has several conditions under which they can terminate the agreement with the franchisee.
According to Item 23, the franchisor may terminate the agreement if the franchisee fails to adhere to the Development Schedule, including executing each Additional Franchise Agreement. Additionally, failure by the franchisee, an employee, or any replacement personnel to complete My Salon Suite University to the franchisor's satisfaction within the prescribed time also constitutes a default, leading to potential termination. If the franchisee or its Designated Manager fail to complete My Salon Suite University within the prescribed period, the franchisor may terminate the Franchise Agreement immediately upon notice to Franchisee and Franchisee is not entitled to any refund of the Initial Franchise Fee or other expenses incurred with My Salon Suite University.
If My Salon Suite terminates the agreement due to the franchisee's breach, the franchisee must pay Early Termination Damages. These damages are calculated as the greater of (i) the average monthly Royalty Fees and Brand Building Fund Contributions that Franchisee owed to Franchisor for the past twenty- four (24) months multiplied by the lesser of thirty-six (36) or the number of months remaining in the Term; or (ii) the average monthly Royalty Fees and Fund Contributions paid by all franchised My Salon Suite businesses who have operated for the past twenty-four (24) months multiplied by the lesser of thirty-six (36) or the months remaining in the Term. If the franchisee has not operated for twenty-four months, the calculation uses the average monthly fees and contributions from all franchised My Salon Suite businesses who have operated for the past twenty-four months, multiplied by thirty-six months. These damages are considered liquidated damages and not a penalty.