Under what conditions can Punch King Fitness terminate a franchise agreement before its expiration?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Any one or more of the following constitutes an "Event of Default" hereunder:
- 1. Developer fails to pay any initial franchise fee or execute any Franchise Agreement by any Fee Deadline specified in the Development Schedule;
- 2. Developer 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;
- 3. A default occurs under any Franchise Agreement, resulting in the termination of such Franchise Agreement; or
- 4. 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.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, the franchise agreement can be terminated early if the developer fails to meet certain obligations. Specifically, Punch King Fitness may terminate the agreement if the developer fails to pay the initial franchise fee or execute the Franchise Agreement by the specified Fee Deadline in the Development Schedule.
Additionally, Punch King Fitness can terminate the agreement if the developer fails to open and maintain the minimum number of Punch King Fitness Franchised Businesses by any Opening Deadline outlined in the Development Schedule. A default occurring under any Franchise Agreement, leading to its termination, also constitutes grounds for termination of the development agreement.
Finally, Punch King Fitness may terminate the agreement if the developer breaches or fails to comply with any provision in the agreement between the franchisor and its affiliates. These conditions provide Punch King Fitness with specific recourse options if the developer does not adhere to the agreed-upon terms and development schedule.