If, during the period in which the franchise is in effect, any of the following events occurs, which event is relevant to the franchise, immediate notice of termination without an opportunity to cure shall be deemed reasonable:

(1) The franchisee or the business to which the franchise relates is declared bankrupt or judicially determined to be insolvent, or all or a substantial part of the assets thereof are assigned to or for the benefit of any creditor, or the franchisee admits inability to pay debts as they come due;

Terms Used In Tennessee Code 47-25-1504

  • Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Franchise: means a written or oral agreement for a definite or indefinite period, in which a person grants to another person authority to use a trade name, trademark, service mark or related characteristic within an exclusive territory, or to sell or distribute goods or services, within an exclusive territory, at wholesale, retail, by lease agreement or otherwise. See Tennessee Code 47-25-1502
  • Franchisee: means a person to whom a franchise is offered or granted only if such person is required to be licensed under §. See Tennessee Code 47-25-1502
  • Franchisor: means a person who grants a franchise to another person where such person is the holder of a permit issued pursuant to §. See Tennessee Code 47-25-1502
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(2) The franchisee willfully abandons the franchise by failing to operate the business for five (5) consecutive days during which the franchisee is required to operate the business under the terms of the franchise, or any shorter period after which it is not unreasonable under the facts and circumstances for the franchisor to conclude that the franchisee does not intend to continue to operate the franchise, unless such failure to operate is due to fire, flood, earthquake or other similar causes beyond the franchisee’s control;
(3) The franchisor and franchisee agree in writing to terminate the franchise;
(4) The franchisee makes any material misrepresentations relating to the acquisition of the franchise business;
(5) The franchised business or business premises of the franchise are seized, taken over or foreclosed by a government official in the exercise of that official’s duties, or seized, taken over, or foreclosed by a creditor, lienholder, or lessor; provided, that a final judgment against the franchisee remains unsatisfied for thirty (30) days (unless a supersedeas or other appeal bond has been filed); or a levy of execution has been made upon the license granted by the franchise agreement or upon any property used in the franchise business, and such levy is not discharged or suspended by accommodation agreement, partial payment agreement, compromise or similar agreement entered within five (5) days of such levy;
(6) The franchisee is convicted of a felony or any other criminal misconduct which is relevant to the operation of the franchise; or
(7) Failure of the franchisee, on two (2) consecutive occasions, to pass minimum health inspections conducted by any state or federal governmental entity.
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