Under what conditions can Punch King Fitness terminate a franchise agreement early in Michigan?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
orily complete such training, Franchisor may require that a replacement person attends and successfully completes, to Franchisor's satisfaction, the initial training program.
Franchisee acknowledges that the grant of the franchise under this Agreement is conditioned upon the successful completion of Franchisor's initial training program by Franchisee or, if Franchisee is other than an individual, the Designated Manager. If during the initial training program or within fifteen (15) days thereafter, Franchisor concludes that Franchisee or the Designated Manager, as the case may be, has not exhibited the aptitude, abilities, or personal characteristics necessary or desirable to successfully operate a Punch King Fitness Franchised Business per the standards and procedures of the Punch King Fitness Methods and the System, Franchisor may, in its sole discretion and judgment, cancel this Agreement and all rights hereunder by giving notice to Franchisee. Upon the cancellation of this Agreement pursuant to this paragraph, Franchisee shall return to Franchisor the Operating Manual and all other materials, information, and other items that Franchisee received from Franchisor, including all copies thereof and notes thereon. Franchisee agrees to maintain the confidentiality of all information strictly received relating to the Punch King Fitness Method and not to use, in connection with the offering or selling of boxing and kickboxing, or similar business, any trade secrets or confidential information obtained from Franchisor.
B. Training of Replacement Personnel
If Franchisee's Designated Manager or Franchised Business Manager ceases active employment in the Franchised Business, Franchisee shall designate a new Designated Manager who meets Franchisor's thencurrent training requirement and is approved by Franchisor within a reasonable amount of time after the cessation of such former Designated Manager's employment, but no later than forty-five (45) days. Franchisor reserves the right to review any Franchisee-trained personnel and require that such persons attend and complete, to Franchisor's satisfaction, the initial training programs offered by Franchisor at a location designated by Franchisor.
C. Ongoing Training.
Franchisor may also require that Franchisee (and/or its Designated Manager), employees, and contractors attend such refresher courses, seminars, and other training programs as Franchisor may reasonably require from time to time.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
Based on the 2024 Punch King Fitness Franchise Disclosure Document, there is no Michigan addendum that would modify the franchise agreement. However, the franchise agreement states that if the franchisee or designated manager does not exhibit the aptitude, abilities, or personal characteristics necessary to successfully operate a Punch King Fitness franchise during the initial training program, Punch King Fitness may cancel the agreement. This decision is at the sole discretion and judgment of Punch King Fitness. This must occur during the initial training program or within fifteen days thereafter.
Additionally, if a franchisee fails to pay any initial franchise fee or execute any Franchise Agreement by any Fee Deadline specified in the Development Schedule, it is considered an event of default. If the franchisee fails 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, it is also considered an event of default. A default that occurs under any Franchise Agreement, resulting in the termination of such Franchise Agreement, or if the Developer breaches or otherwise fails to comply fully with any other provision contained in this Agreement herein or any other agreement between the Franchisor and/or its Affiliates, it is considered an event of default.
If any of these events of default occur, Punch King Fitness may declare the agreement to be immediately terminated and of no further force or effect. It is important for a prospective franchisee to carefully review the franchise agreement and development schedule to understand all the conditions that could lead to early termination and to ensure they can meet the obligations outlined in the agreement.