Keke’s Breakfast Cafe Franchises Closed Due to Breach of Contract

Many budding entrepreneurs focus their time on franchises since they are established businesses that have set procedures in place. This makes running a business a lot easier and with less risk. However, there are still laws that need to be followed, especially when it comes to making payments.

Not following the rules can lead to breach of contract. This recently happened to a restaurant in Florida. Keke’s Breakfast Cafe has confirmed that two of its franchise locations in Orlando closed in late December. The closures are permanent, affecting the locations at 2433 S. Hiawassee Road and 431 S. Chickasaw Trail.

Keke’s Inc. terminated the franchise agreement due to breaches of contract. Former employees were notified when they arrived for work on December 30 and were told by representatives from Keke’s corporate team that the locations had closed. One employee found an eviction notice on the door of the Chickasaw Trail location.

The two restaurants were part of a seven-unit franchise deal between Keke’s and Solomon Retail Group. The other five locations — in Kissimmee, Hunters Creek,  Millenia, Ocoee, and Conway — also closed but later reopened with Keke’s assuming operations.

Four other Keke’s restaurants closed temporarily as franchisee GLA Restaurants LLC lost control of the businesses due to legal and financial issues. The restaurants were located in  Winter Park, Apopka, Lake Mary, and Windermere.

The closures come at the same time as Keke’s nationwide expansion efforts. The company was acquired by Denny’s Corp. in 2022. Since then, the chain has expanded from 52 to 65 locations. So far, Denny’s has signed more than 140 development agreements for Keke’s. The goal is to surpass 200 agreements.

Breach of Contract in Franchises

Breach of contract in franchises occurs when either the franchisor or franchisee fails to meet the obligations outlined in the franchise agreement. This can lead to legal disputes, financial penalties, or even termination of the franchise relationship. Common causes of breach of contract include:

• Failure to pay fees. The franchisee does not pay royalties, advertising fees, or other required payments.
• Non-compliance with brand standards. The franchisee fails to adhere to operational, quality, or branding guidelines.
• Territory violations. The franchisor opens a new location that competes with an existing franchisee in an exclusive territory.
• Failure to provide support. The franchisor does not deliver promised training, marketing, or operational assistance.
• Unauthorized products or services. The franchisee sells items not approved by the franchisor.
• Early termination. Either party ends the agreement without following contractual procedures.

Learn More About Franchises

 Franchises may be easier to operate than businesses created by entrepreneurs, but there are still laws that must be followed. For example, breach of contract still applies.

Orlando franchise lawyer B.F. Godfrey from Godfrey Legal can guide you through the minefields that accompany starting up, or buying into, a franchise system. Schedule a consultation with our office today to learn more. Call (407) 890-0023 or fill out the online form.

Source:

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