Under what conditions can Punch King Fitness terminate the Area Development Agreement with cause?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
------| | e. | Termination by us without cause | Not applicable | | | f. | Termination by us with cause | Section VII | We can terminate only if you default. We can terminate the Area Development Agreement if the Franchise Agreement is terminated. Termination of the Area Development Agreement is not cause for terminating the Franchise Agreement. | | g. | "Cause" defined defaults which can be cured | Not applicable | | | h. | "Cause" defined defaults which cannot be cured | Section VII(A) | We may terminate the agreement if you fail to pay any initial franchise fee or execute any Franchise Agreement by any Fee Deadline specified in the Development Schedule; you fail to have opened and maintained in continuous operation the minimum number of Punch King Fitness Franchised Businesses specified in the Development Schedule by any Opening Deadline specified in the Development Schedule; if a default occurs under any Franchise Agreement, resulting in the termination of such Franchise Agreement; or you breach or otherwise fail to comply fully with any other provision contained in this Area Development Agreement or any other agreement between the Franchisor and/or its Affiliates.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–53)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, the company can terminate the Area Development Agreement with cause if the franchisee defaults on the agreement. Specifically, Punch King Fitness can terminate the agreement if the franchisee fails to pay any initial franchise fee or execute any Franchise Agreement by the Fee Deadline outlined in the Development Schedule.
Additionally, Punch King Fitness can terminate the agreement if the franchisee fails to open and continuously operate the minimum number of Punch King Fitness Franchised Businesses by the Opening Deadline specified in the Development Schedule. Another cause for termination is if a default occurs under any Franchise Agreement, leading to the termination of that Franchise Agreement.
Finally, Punch King Fitness can terminate the Area Development Agreement if the franchisee breaches or fails to comply with any other provision in the Area Development Agreement or any other agreement between the franchisor and/or its affiliates. However, it is important to note that a default under the Area Development Agreement does not automatically lead to the termination of any existing Franchise Agreements.