What is the dependency between the transfer of equity interest and Franchisor approval for Canine Dimensions?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
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Business so as to assure no interruption in the services then being provided to the clients of the Franchised Business;
13.6.2 within thirty (30) days after the death or disability, ensure that the person operating the Franchised Business has at least a 30% equity interest in Franchisee (any Transfer must be approved by Franchisor as provided in this Article 13; and
13.6.3 within six (6) months after such death or disability, Transfer the decedent's or disabled party's interest to a third party approved by Franchisor. Such Transfers, including, without limitation, Transfers by devise or inheritance, shall be subject to the same conditions as set forth in Section 13.2.2. In the case of Transfer by devise or inheritance, however, if the heirs or beneficiaries of any such person are unable to meet the conditions in this Section 13.6, the personal representative of the deceased Franchisee shall have a reasonable time to dispose of the deceased's interest in the Franchise, which disposition shall be subject to all the terms and conditions for Transfers contained in this Agreement. If the interest is not disposed of within a reasonable time, Franchisor may terminate this Agreement. If Franchisee's executor, administrator, or personal representative is unable to find a replacement person to operate the Franchised Business as contemplated in this Section 13.6, to prevent any interruption of business of the Franchised Business and any injury to the goodwill and reputation of the Franchised Business, Franchisor will have the right (but not the obligation) to operate the Franchised Business until Franchisee's executor, administrator, or personal representative is able to take the steps set forth above. If Franchisor operates the Franchised Business, Franchisor shall have the right to collect and pay from the revenues of the Franchised Business all expenses relating to the operation of the Franchised Business including, without limitation, Royalty Fees and Internet Advertising payments, employee salaries, reimbursement of Franchisor' expenses incurred in connection with such operation, and a management fee of three hundred and fifty dollars ($350) per day. Franchisee shall indemnify and hold Franchisor harmless from any and all claims arising f
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, any transfer of equity interest in a Canine Dimensions franchise is contingent upon the franchisor's approval. Specifically, if a franchisee dies or becomes disabled, the person operating the franchised business must secure at least a 30% equity interest in the franchise within 30 days. However, this transfer is explicitly subject to the franchisor's approval, as outlined in Article 13 of the franchise agreement.
Furthermore, within six months of the death or disability, the decedent's or disabled party's interest must be transferred to a third party, and this transfer also requires Canine Dimensions' approval. These transfers, including those by devise or inheritance, are subject to the same conditions detailed in Section 13.2.2 of the agreement. If the heirs or beneficiaries cannot meet these conditions, the personal representative has a reasonable time to dispose of the interest, again subject to all transfer terms in the agreement.
If the interest is not disposed of within a reasonable timeframe, Canine Dimensions retains the right to terminate the franchise agreement. To prevent business interruption and protect the franchise's goodwill, Canine Dimensions has the option to operate the business until a suitable replacement is found. If Canine Dimensions operates the franchise, it can collect revenues and pay expenses, including royalty fees, advertising payments, employee salaries, and a management fee of $350 per day, while the franchisee indemnifies Canine Dimensions against any claims arising from their operation during this period. This highlights the franchisor's significant control over equity transfers and the operation of the franchise, even in unforeseen circumstances such as death or disability.