What instruments must a franchisee deliver to 1 800 Packouts at the closing of an asset purchase?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
At the closing, you agree to deliver instruments transferring to us: (a) good and merchantable title to the Purchased Assets, free and clear of all liens and encumbrances (other than liens and security interests acceptable to us), with all sales and transfer taxes paid by you; and (b) all of the Franchised Business' licenses and permits which may be assigned or transferred.
If you cannot deliver clear title to all of the Purchased Assets, or if there are other unresolved issues, the sale will be closed through an escrow.
You and your Owners further agree to sign general releases, in a form satisfactory to us, of any and all claims against us and our affiliates and our and their respective owners, officers, directors, employees, agents, representatives, successors and assigns.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 FDD, at the closing of an asset purchase, a 1 800 Packouts franchisee must deliver instruments that transfer good and merchantable title to the purchased assets to 1 800 Packouts. This transfer must be free and clear of all liens and encumbrances, except those acceptable to 1 800 Packouts, and all sales and transfer taxes must be paid by the franchisee. Additionally, the franchisee must transfer all of the franchised business's licenses and permits that can be assigned or transferred.
If the franchisee cannot provide clear title to all purchased assets or if there are unresolved issues, the sale will be closed through an escrow account. This provides a safeguard for both parties, ensuring that funds and assets are held securely until all conditions of the sale are met.
Furthermore, the franchisee and their owners must sign general releases, in a form satisfactory to 1 800 Packouts, releasing any and all claims against 1 800 Packouts, its affiliates, and their respective owners, officers, directors, employees, agents, representatives, successors, and assigns. This comprehensive release protects 1 800 Packouts from potential future legal claims related to the franchise.