According to the 2024 Red Wagon Club Franchise Disclosure Document, if a Red Wagon Club franchisee or any of its owners is convicted of a felony by a trial court, or pleads guilty or no contest to a felony, Red Wagon Club has the right to terminate the Franchise Agreement. The termination is effective immediately upon delivery of written notice to the franchisee.

This clause protects Red Wagon Club's brand and reputation by ensuring that individuals associated with the franchise maintain a certain level of legal and ethical standing. A felony conviction can severely damage public perception of the business, and this provision allows Red Wagon Club to sever ties with individuals who may pose such a risk.

For a prospective franchisee, this means that maintaining a clean legal record is crucial. Any past or future felony convictions or guilty pleas could jeopardize their investment and their right to operate a Red Wagon Club franchise. This condition is fairly standard in franchising, as franchisors typically want to avoid any association with criminal activity.