Does Big Air Trampoline Park have to remain liable to the franchisee after a transfer of the franchise system?
Big_Air_Trampoline_Park Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges and agrees that Franchisor may sell its assets, the Marks or the System to any third party of Franchisor's choice; may offer its securities privately or publicly; may merge with or acquire other business entities or be acquired by another business entity; may permit and participate in any transfer or distribution of its securities in connection with a spin-off; may undertake a refinancing, recapitalization, leveraged buyout, or other economic or financial restructuring; or may terminate or cease to exist or dissolve, in any such case without Franchisee's consent and, provided the transferee expressly assumes and undertakes to perform Franchisor's obligations in all material respects, do so free of any responsibility or liability whatsoever to Franchisee after the transaction occurs.
- 15.3 With regard to any of the above sales, assignment and dispositions, Franchisee expressly and specifically waives any claims, demands, or damages against Franchisor arising from or related to the transfer of the Marks, assets or the System from Franchisor to any other party.
Source: Item 23 — RECEIPT (FDD pages 53–255)
What This Means (2025 FDD)
According to the 2025 FDD, Big Air Trampoline Park may transfer the franchise system to another party without remaining liable to the franchisee, provided the transferee assumes the obligations. Specifically, Big Air Trampoline Park can sell its assets, trademarks, or the entire system to a third party. They can also offer securities, merge with or be acquired by another entity, participate in security transfers related to a spin-off, undergo financial restructuring, or even dissolve without the franchisee's consent.
However, this freedom from liability is conditional. The new entity taking over the franchise system must expressly agree to fulfill Big Air Trampoline Park's obligations in all material respects. If this condition is met, Big Air Trampoline Park is released from any further responsibility or liability to the franchisee once the transaction is complete.
Furthermore, the franchisee waives any claims, demands, or damages against Big Air Trampoline Park arising from the transfer of the trademarks, assets, or the system to another party. This waiver is a significant point for prospective franchisees to consider, as it limits their recourse against the original franchisor following a transfer. This type of clause is relatively common in franchise agreements, as it allows franchisors flexibility in structuring their business without being perpetually tied to the obligations of the franchise agreement after a transfer, provided a suitable successor assumes those responsibilities.