What is the seller required to do with the Burneys Sweets More Franchise Agreement upon closing?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
lease of Guaranty. The Seller Franchise Agreement provides that the Transfer cannot take place without the consent of Franchisor. Franchisor will consent to the Transfer, as provided in the Seller Franchise Agreement, and will release (a) Seller from any obligations arising under the Seller Franchise Agreement and (b) Seller Guarantors under any guaranty agreement (in each case except as described below) from and after the Effective Date; provided, however, such consent and release are expressly contingent upon compliance with the following terms and conditions on or before the date of the closing of the Transfer ("Closing"):
- a. Franchise Agreement. The Seller Franchise Agreement will terminate as of the Closing, and the operation of the Franchised Location will thereafter be governed by the Buyer Franchise Agreement;
- b. Payment of Amounts Due. Seller will pay all amounts due and owing to Franchisor through the date of Closing; including but not limited to past due royalty and advertising fees in the amount of $_________________;
- c. Transfer Fee. Seller shall pay a transfer fee of $_________________ as provided in the Seller Franchise Agreement;
- d. Financial Statements. Seller will provide Franchisor with all required monthly financial statements for the Franchised Location through the date of Closing;
- e. Training.
Source: Item 23 — RECEIPT (FDD pages 50–199)
What This Means (2025 FDD)
According to Burneys Sweets More's 2025 Franchise Disclosure Document, the Seller Franchise Agreement will terminate as of the closing date of the transfer. The operation of the franchised location will then be governed by the Buyer Franchise Agreement. This means that the seller's rights and obligations under their original franchise agreement with Burneys Sweets More cease once the transfer to the buyer is finalized.
However, the seller isn't entirely free of obligations. The seller must pay all outstanding amounts owed to Burneys Sweets More through the closing date, including any past due royalty and advertising fees. The seller is also responsible for paying a transfer fee as stipulated in the Seller Franchise Agreement. Additionally, the seller must provide all required monthly financial statements for the franchised location up to the closing date.
Even after the agreement terminates, certain provisions of the Seller Franchise Agreement that, either expressly or by their nature, survive termination remain in effect. These include post-termination restrictive covenants, audit rights, dispute resolution and notice, and confidentiality provisions. This ensures that even after the transfer, the seller remains bound by certain obligations to protect Burneys Sweets More's interests.