What happens if there are liens or encumbrances on the assets being purchased by All County?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
23.6.7.1. good and merchantable title to the assets purchased, free and clear of all liens and encumbrances (other than liens and security interests acceptable to us), with all sales and other transfer taxes paid by you; and
23.6.8. Escrow. If you cannot deliver clear title to all of the purchased assets, or if there are other unresolved issues, the closing of the sale will, at our election, be accomplished through an escrow arrangement with an independent escrow agent selected by us.
We have the right to set off against the purchase price, and thereby reduce the purchase price by, any and all amounts you or your owners owe to us.
- 23.6.9. Releases. You and your owners agree to execute general releases, in form satisfactory to us, of any and all claims against us and our shareholders, officers, directors, employees, agents, successors and assigns.
Source: Item 23 — Receipts (FDD pages 43–157)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, when All County exercises its option to purchase a franchise location, the franchisee is expected to deliver a clear title to the assets. Specifically, the franchisee must transfer good and merchantable title to the assets being purchased, free and clear of all liens and encumbrances. The franchisee is also responsible for paying all sales and other transfer taxes. However, this is with the caveat that All County may accept liens and security interests.
If the franchisee cannot provide a clear title to all purchased assets or if there are other unresolved issues, All County has the option to use an escrow arrangement. In this case, an independent escrow agent selected by All County will handle the closing of the sale. This arrangement ensures that the funds and assets are securely managed until all conditions of the sale are met.
Furthermore, All County has the right to reduce the purchase price by any amounts that the franchisee or their owners owe to All County. This is known as a right of offset. Additionally, the franchisee and their owners must execute general releases, in a form satisfactory to All County, releasing any claims against All County and its affiliates. These measures protect All County's interests and ensure a smooth transfer of assets.