Does the All States M.E.D. FDD specify what 'otherwise ceased to do business' means in the context of former franchisees?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
shall be entitled to reimbursement of any expenses Franchisor incurs that are not paid out of the operating cash flow of the Franchised Business.
17. RIGHTS AND DUTIES UPON EXPIRATION OR TERMINATION
17.1 Actions to be Taken
Except as otherwise provided herein, upon termination or expiration, this Agreement and all rights granted hereunder to Franchisee shall terminate and Franchisee shall:
(a) immediately cease to operate the Franchised Business and shall not thereafter, directly or indirectly, represent to the public or hold itself out as a present or former franchisee of Franchisor;
- (b) cease to use the Trade Secrets or other Confidential Information, the System and the Marks, including, without limitation, all slogans, symbols, logos, advertising materials, stationery, forms, and any other items which display or are associated with the Marks;
- (c) take such action as may be necessary to cancel or assign to Franchisor, at Franchisor's option, any assumed name or equivalent registration filed with state, city, or county authorities which contains the name "All States M.E.D." or any other Mark, and Franchisee shall furnish Franchisor with evidence satisfactory to Franchisor of compliance with this obligation within thirty (30) days after termination or expiration of this Agreement;
- (d) pay all sums owing to Franchisor and any Affiliate. In the event of termination for any default of Franchisee, such sums shall include, but not be limited to, all damages, costs, and expenses, including reasonable attorneys' fees, with respect to litigation, arbitration, appellate, or bankruptcy proceedings, unpaid Royalty Fees, loss of future Royalty Fee payments incurred by Franchisor as a result of any early termination of this Agreement, and any other amounts due to Franchisor or any Affiliate;
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
The 2024 All States M.E.D. Franchise Disclosure Document does not specifically define what constitutes 'otherwise ceased to do business' in the context of former franchisees. However, it does outline several obligations that a franchisee must adhere to upon termination or expiration of the franchise agreement. These obligations provide some context as to what actions a former franchisee must take when ceasing business operations.
Upon ceasing business operations, an All States M.E.D. franchisee must immediately stop operating the franchised business and cannot represent themselves as a current or former franchisee. They must discontinue the use of trade secrets, confidential information, the All States M.E.D. system, and all associated marks, including slogans, logos, and advertising materials. The franchisee is also required to cancel or assign any assumed name registrations containing "All States M.E.D." or any other mark to the franchisor.
Furthermore, the franchisee is obligated to return the operations manual, trade secrets, and all other confidential information to All States M.E.D. They must also assign all telephone listings and numbers associated with the franchised business to the franchisor and notify the telephone company of the termination of their right to use these numbers. While the FDD doesn't explicitly define 'otherwise ceased to do business,' these outlined responsibilities indicate the expected conduct of a franchisee who is no longer operating an All States M.E.D. franchise.