Do I have to file a Notice of Default within a certain amount of time for a breached franchise settlement agreement?

Asked 4 months ago - Chicago, IL

I have a settlement agreement with a franchise that has agreed to return franchise fees I paid by 12/31. The owner called me and said he needs two more weeks to pay. The agreement states that they have 5 days to cure a default upon receipt of the notice of default. Do I have to send the notice of default right after the due date of 12/31 or can I give him the extra 2 weeks and send the notice mid January if he does not pay by then? I want to make sure this guy is not trying to weasel his way out of paying if I don't file within the required timeframe.

Attorney answers (6)

  1. Alan James Brinkmeier

    Contributor Level 20

    6

    Lawyers agree

    Answered . No quality advice can be provided without a contract review.

    Hire counsel and move to act upon your rigths.

  2. Bruce E. Burdick

    Pro

    Contributor Level 20

    5

    Lawyers agree

    1

    Answered . An attorney review of agreement, and only then do you get actionable advice. Normally you follow the language strictly and send notices on time to preserve your rights. The extra time should normally be after the notice not before.

    I am not your lawyer and you are not my client. Free advice here is without recourse and any reliance thereupon is... more
  3. Robert Alan Cohen

    Pro

    Contributor Level 12

    5

    Lawyers agree

    Answered . This is the type of thing that has to be considered in light of the contract language. It may or may not be a default for the other party to state that he "might" need more time. You need to see an attorney to answer this question.

    Answering this question does not set up a attorney-client relationship between us. My comments do not constitute... more
  4. Jorge Robert Salva

    Contributor Level 5

    4

    Lawyers agree

    Answered . It's hard to give you guidance without having the full contract in front of me, but based on experience, notices of default and rights of defaulting party to cure must be followed strictly as set forth in the contract. Prematurely starting a lawsuit when there is a question as to proper notice might result in swift dismissal. Best to consult with a business or franchise attorney before taking action against the other party.

    The response to any inquiry or blog post on this website does not create an attorney/client relationship with... more
  5. Kevin Brendan Murphy

    Pro

    Contributor Level 15

    2

    Lawyers agree

    3

    Answered . As a franchise attorney familiar with these agreements and default notices, I agree with my colleagues.

    Without reviewing the agreement, it's impossible to advise, but generally speaking this is how the process usually works. If the fees were not paid by Dec 31st, he is in default and you need to send a notice of default. It's important to follow the notice provisions exactly. For example, it may specify a certain address and method of delivery - like certified mail, etc. When the 5 day cure period starts is another issue that depends on the wording of the agreement. For example, it may (and usually does) start when he's received the default notice. Is it 5 calendar days or business days?

    Bottom line is show the agreement to an attorney in your area, and don't delay. The default notice should go out right away if you haven't been paid.

    Good luck,

    Kevin B. Murphy, B.S., M.B.A., J.D.
    Franchise Attorney & Franchise Expert
    Director of Operations - Mr. Franchise
    FRANCHISE FOUNDATIONS APC

  6. Dana Howard Shultz

    Contributor Level 19

    3

    Lawyers agree

    Answered . I agree with my colleagues:

    You need to retain a lawyer to examine the relevant agreement, other documents and facts and advise you accordingly.

    This information does not constitute legal advice and does not establish an attorney-client relationship.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

23,777 answers this week

2,739 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

23,777 answers this week

2,739 attorneys answering

Legal Dictionary

Don't speak legalese? We define thousands of terms in plain English.

Browse our legal dictionary