After the termination or expiration of a Benjamin Franklin Plumbing franchise agreement, what financial obligations remain?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
not to exercise our option to acquire the lease, you are required to make modifications or alterations to the Approved Location as necessary to comply with Section 17.2 and to distinguish the Approved Location from that of a Franchised Business.
17.1.2 At our request, sell to us such of the furnishings, fixtures, vehicles, equipment, and signs of the Franchised Business as we may designate, at fair market value, and such of the inventory and supplies on hand as we may designate, at fair market wholesale value. If the parties cannot agree on the price of any such items within thirty (30) days, we will appoint an independent appraiser, and the appraiser's determination will be final. Franchisor and Franchisee will each pay one-half of the appraiser's fees and costs. We will have thirty (30) days after receipt of the appraiser's determination to decide whether to proceed with the purchase. If we exercise our option to purchase any items, we will have the right to set off any amount due to us or our affiliate from you against any payment for the items.
17.1.3 At our request, provide us with a copy of each customer agreement for the Franchised Business and any related information we request, and provide us with all other information and access necessary for us (or our designee) to continue servicing the customer and related business relationships within three (3) days from our request at no cost to us (since the Customer Data is our property). To this end, each customer agreement must include a clause providing us the unconditional right (but not an obligation) to assume (directly or through a designee) the customer agreement upon the termination or expiration of this Agreement, including all of your rights and obligations thereunder that arise from and after such assumption. Upon the expiration or termination of this Agreement, you agree to facilitate our conversations with customers to ensure an orderly transition of the business operations. You agree to pay over to us (or our designee) any amounts (or a pro rata portion of any amounts) paid to you by your customers for services that you have not yet performed.
17.1.4 We can exercise any or all of our options under Sections 17.1.1, 17.1.2 and 17.1.3: (a) within thirty (30) days after the expiration of the Agreement Term, in the case of expiration of this Agreement; and (b) in the case of termination of this Agreement, at any time between the date of delivery of written notice of termination and thirty (30) days after the effective date of termination (or after the arbitration or court ruling upholding the termination, if termination is contested). We may assign these options to another person or entity. To preserve the value of these options, we may issue to you, and you are required to comply with, written instructions to refrain from, delay, or reverse any of the actions required of you under Section 17.2.
17.2. De-identification.
Source: Item 23 — RECEIPTS (FDD pages 88–312)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, several financial obligations may survive the termination or expiration of the franchise agreement. Benjamin Franklin Plumbing has the right to assume customer agreements upon termination or expiration, and the franchisee must transfer any customer payments received for unperformed services. This ensures a smooth transition of customer service and prevents the franchisee from profiting from services not rendered.
Additionally, all obligations that are meant to be performed after the agreement's end will remain in effect. Benjamin Franklin Plumbing also has the option to purchase the franchisee's assets, such as the location lease, furnishings, vehicles, equipment, and inventory. If Benjamin Franklin Plumbing exercises this option, the franchisee will be obligated to sell those assets at fair market or wholesale value, as determined by an independent appraiser if necessary, with both parties splitting the appraiser's fees.
Furthermore, if Benjamin Franklin Plumbing terminates the agreement due to the franchisee's default, the franchisee may be required to pay liquidated damages. These damages are calculated as the greater of two years' worth of royalty fees or $100,000, in addition to any other costs and expenses owed under the agreement. These financial repercussions highlight the importance of adhering to the franchise agreement and fulfilling all obligations to avoid potentially significant financial liabilities upon termination or expiration.