Cross-default and repeated default in franchise agreements
What the sources establish about repeated defaults, with examples from Washington and California statutes, and what they do not establish about cross-default.
Two ideas travel under these names. A repeated-default clause lets a franchisor treat a pattern of notices as enough to terminate. A cross-default clause, as the term is generally used, links separate agreements so that a default under one counts under another. What the sources read for this site establish about each is set out below.
Cross-default: what is not established
No statute, regulation or court opinion read for this site defines or describes a cross-default clause in a franchise agreement. So this page does not say how common such clauses are, how they are worded, or how courts treat them. The only reliable way to know whether your agreements contain one is to read them, and the franchisor's Item 17 table is the place to see how the franchisor summarizes default and termination terms. See Item 17 of the FDD.
Repeated default: what the sources say
The IFA-hosted article by two franchise lawyers says franchisees should want to avoid accumulating formal default notices, because repeated violations can later support an incurable default under the agreement's termination provisions. The article refers to "repeated violations" or "repeated default" provisions. It does not say how many notices trigger one. That depends on the contract.
Some statutes address the same pattern. They are examples, not a national rule:
- Washington: after three willful and material breaches of the same term within a twelve-month period, each of which came with notice and an opportunity to cure, the franchisor may terminate on any later willful and material breach of that same term within the twelve months without providing notice or an opportunity to cure.
- California: the list of events for which immediate termination without an opportunity to cure is deemed reasonable includes repeat noncompliance and repeated failures. Read the exact wording in Business and Professions Code 20021 before relying on it.
- Rhode Island, read from an archived copy of the statute (check the official text): nonpayment of sums due carries a 10-day cure after written notice, and the cure right is limited to three cures per 12 months.
Why the count matters
Where a clause or statute counts prior notices, each earlier notice and each response to it may matter later. The same article advises franchisees to document compliance efforts in writing. See documents to gather after a default notice and incurable defaults.
Whether a particular earlier notice counts, whether it was properly given, and whether a clause applies to your situation are questions for the agreement, the notices and a lawyer licensed in your state. Washington's provision speaks of the same term within twelve months, so check the exact wording of any provision before assuming what counts as a repeat.
Where this came from
- IFA site, "Handling Defaults and Terminations Effectively" (checked 28 October 2026).
- Wash. Rev. Code 19.100.180(2)(j) (checked 28 October 2026).
- Cal. Bus. & Prof. Code 20021 (checked 28 October 2026).
- R.I. Gen. Laws 6-50-4, archived copy (checked 28 October 2026).
- 16 CFR 436.5(q), Item 17 (checked 28 October 2026).