What section of the My Salon Suite Franchise Agreement outlines the grounds for termination?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
nment for the benefit of creditors, files a voluntary petition in bankruptcy, is adjudicated bankrupt or insolvent, files or acquiesces in the filing of a petition seeking reorganization or arrangement under any federal or state bankruptcy or insolvency law or consents to or acquiesces in the appointment of a trustee or receiver for Franchisee or the Franchised Business.
- (2) Involuntary Bankruptcy. If proceedings are commenced to have Franchisee adjudicated bankrupt or to seek Franchisee's reorganization under any state or federal bankruptcy or insolvency law, and such proceedings are not dismissed within sixty (60) days, or a trustee or receiver is appointed for Franchisee or the Franchised Business without Franchisee's consent, and the appointment is not vacated within sixty (60) days.
- (3) Unauthorized Transfer. Franchisee purports to sell, transfer or otherwise dispose of Franchise or any interest in the franchise business in violation of Section 16 hereof.
- (4) With Notice and Without Opportunity to Cure. Franchisor has the right to terminate this Franchise Agreement upon notice without providing Franchisee an opportunity to cure for any of the following breaches or defaults:
- (5) Criminal Acts. If Franchisee or Franchisee's principals are convicted of or plead guilty or no contest to a felony or other offense related to the operation of the Franchised Business or that Franchisor believes, in its sole discretion, is likely to have an adverse effect on the Proprietary Marks or the goodwill associated therewith.
- (6) Fraud. If Franchisee or Franchisee's principals commit any fraud or misrepresentation in the operation of the Franchised Business, including but not limited to, any misrepresentation made in Franchisee's franchise application.
- (7) Other Actions. If Franchisee or Franchisee's principals, including any shareholder, guarantors, or agents, engage in activity or conduct which materially impairs that goodwill associated with the System or the Proprietary Marks and fails to cease and correct such activities or conduct within twenty-four (24) hours of Franchisee's receipt of written notice of a breach under this Section.
- (8) Misrepresentation. If Franchisee or Franchisee's principals make any misrepresentation or omission in connection with Franchisee's franchise application, including but not limited to any financial misrepresentation.
- (9) Failure to Complete Training or Attend Annual Conference. If Franchisee fails to: (a) complete My Salon Suite University; or (b) attend the Annual Conference as required under this Franchise Agreement, unless excused by prior written consent of Franchisor.
- (10) Repeated Breaches. If Franchisor sends Franchisee three (3) or more written notices to cure pursuant to Sections 14.A. or 14.B. hereof in any 12-month period, regardless of whether the defaults set forth in the notices were subsequently cured.
Source: Item 23 — RECEIPTS (FDD pages 95–230)
What This Means (2025 FDD)
The 2025 My Salon Suite Franchise Disclosure Document's Item 23 discusses grounds for termination of the franchise agreement. Specifically, it outlines various scenarios where My Salon Suite has the right to terminate the agreement with or without providing an opportunity for the franchisee to correct the issue. These include unauthorized transfers of the franchise, criminal acts by the franchisee or its principals, fraud or misrepresentation in the operation of the franchised business or in the franchise application, failure to complete required training or attend the annual conference, and repeated breaches of the agreement.
My Salon Suite can terminate the agreement with notice but without an opportunity to cure if the franchisee purports to sell, transfer, or dispose of the franchise in violation of the agreement. Similarly, criminal acts, fraud, misrepresentation, failure to complete training or attend the annual conference, and repeated breaches also constitute grounds for termination without opportunity to cure. The agreement also specifies that engaging in activities that materially impair the goodwill associated with the My Salon Suite system or proprietary marks can lead to termination if the franchisee fails to cease and correct such activities within 24 hours of written notice.
Additionally, failure to adhere to the development schedule for opening additional franchised businesses, including executing each Additional Franchise Agreement, constitutes a material breach that can lead to termination upon notice. If the agreement is terminated, any remaining option rights to open additional franchised businesses or territorial protection in the development area will also be terminated without any refund of the development fee. These stipulations highlight the importance of adhering to the terms of the franchise agreement and maintaining the standards and reputation of the My Salon Suite brand.