Does Apricot Lane have an obligation to furnish a prospective transferee or assignee with copies of the franchisee's financial statements?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISOR shall have the right, but not the obligation, to furnish any prospective transferee or assignee with copies of all financial statements which have been furnished by FRANCHISEE to FRANCHISOR in accordance with this Agreement during the three (3) year period prior to the date the approval of the proposed transfer is sought. FRANCHISOR shall also have the right, but not the obligation, to advise any prospective assignee of any uncured breaches or defaults by FRANCHISEE under this Agreement, or any other agreement relating to the Franchised Business proposed to be assigned, transferred, or sold or any other material information relative to the Franchised Business. FRANCHISOR shall have no liability to FRANCHISEE or its owners for making any such disclosures in good faith to a proposed transferee or assignee. FRANCHISOR's approval of such proposed transaction shall not, however, be deemed a representation or guarantee by FRANCHISOR that the terms and conditions of the proposed transaction are economically sound or that, if the transaction is consummated, the assignee will be capable of successfully conducting the Franchised Business and no inference to such effect shall be made from such approval.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, Apricot Lane has the right, but not the obligation, to furnish a prospective transferee or assignee with copies of the franchisee's financial statements. This includes all financial statements that the franchisee has provided to Apricot Lane over the three-year period before the proposed transfer.
In addition to providing financial statements, Apricot Lane also has the right, but not the obligation, to inform any potential assignee of any unresolved breaches or defaults by the franchisee under the Franchise Agreement or any other related agreement. They can also disclose any other material information about the franchised business.
Apricot Lane is not liable to the franchisee or its owners for making these disclosures in good faith to a potential transferee or assignee. Furthermore, Apricot Lane's approval of a proposed transaction does not represent or guarantee that the terms and conditions are economically sound or that the assignee will successfully conduct the franchised business.