Must a Canine Dimensions franchisee be free from default to transfer their franchise?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
C. Canine Dimensions, as permitted by the Franchise Agreement is conditioning its consent to such transfer or renewal on the execution of this Mutual General Release Agreement by Franchisee.
In consideration of the mutual covenants and conditions contained in this Mutual General Release and in the Franchise Agreement, and other good and valuable consideration, receipt of which is hereby acknowledged by each of the parties, the parties agree as follows:
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- Canine Dimensions and Franchisee do hereby mutually release and forever discharge each other and each other's heirs, successors, representatives, assigns, agents, employees, officers, and directors ("Designees"), and each of them, of and from any claims, debts, liabilities, demands, obligations, costs, expenses, actions, and causes of action of every nature, character, and description known or unknown, vested or contingent, which each party now owns or holds, or has at any time heretofore owned or held, or may at any time own or hold against the other party hereto, arising prior to and including the date of this Mutual General Release Agreement; provided, however, that this release shall exclude claims arising from assertion of any continuing rights reserved in this Mutual General Release Agreement.
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- This release shall not apply to any claims which the Franchisee may have arising under (a) the California Franchise Investment Law or the California Franchise Relations Act; (b) the Hawaii Franchise Investment Law; (c) the Maryland Franchise Registration and Disclosure Law; (d) the Minnesota Franchise Act; (e) the New York Franchise Investment Law; (f) the North Dakota Franchise Investment Law; or (g) the Washington Franchise Investment Protection Act, RCW 19.100, and the rules adopted thereunder. This release shall exclude claims arising from Franchisee's failure to pay any amounts due Canine Dimensions in the ordinary course of business. The parties expressly agree that this Mutual General Release Agreement will not apply to any claims Canine Dimensions may have under any Promissory Notes ancillary to the Franchise Agreement, or that pertain to other payment arrangements that the parties may have agreed upon.
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, the franchisor conditions its consent to a franchise transfer on the execution of a Mutual General Release Agreement by the franchisee. This agreement is required as permitted by the Franchise Agreement.
The Mutual General Release Agreement involves both Canine Dimensions and the franchisee releasing each other from claims, debts, liabilities, and demands. This release covers any issues that occurred up to the date of the agreement. However, there are exceptions, including claims arising from a franchisee's failure to pay amounts due to Canine Dimensions in the ordinary course of business.
For a prospective Canine Dimensions franchisee, this means that to transfer their franchise, they must generally resolve any outstanding financial obligations to the franchisor. Failure to do so could prevent the transfer, as the franchisor requires a release of claims, which excludes unpaid debts. Franchisees should be aware of this requirement and ensure they are current on all payments before attempting to transfer their franchise.