What happens to the franchisee's assets if they default on payments to Card My Yard after termination?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
o the Marks, nor shall you use any designation of origin or description or representation which falsely suggests or represents an association or connection with us constituting unfair competition.
- (5) Promptly pay all sums owing to us and our Affiliates, and all damages, costs and expenses, including reasonable attorneys' fees and costs, incurred by us as a result of any default by you or in connection with obtaining injunctive or other relief for the enforcement of any provisions of this Article XIX., which obligation shall give rise to and remain a lien in favor of us against any and all of your assets, until such obligations are paid in full.
- (6) Promptly deliver to us all Manuals, Software Programs, Confidential Information, and other materials related to the operation of the Card My Yard business in your possession or control, and all copies thereof, all of which are acknowledged to be our property, and retain no copy or record of any of the foregoing, except your copy of this Agreement and of any correspondence between you and us and any other documents which you reasonably need for compliance with any provision of law. Such shall expressly include all branded materials, signs purchased from us, and all other materials relating to or arising out of the operation of the Card My Yard business, which must be delivered within ten (10) business days to us, at our cost.
- (7) Comply with the restrictions against the disclosure of Confidential Information and against competition contained in Article XI.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, if a franchisee defaults on payments, Card My Yard has a lien against any and all of the franchisee's assets until all obligations are paid in full. This includes sums owed to Card My Yard and its affiliates, as well as any damages, costs, and expenses, including reasonable attorney's fees, incurred by Card My Yard as a result of the franchisee's default.
Additionally, upon termination or expiration of the Franchise Agreement, Card My Yard has the power of attorney to assign to themselves all rights to the telephone numbers of the Card My Yard business, any related business listings, and all rights to any website listings or services, search engines or systems, and any other business listings related to the Card My Yard business. At their option, Card My Yard can also take the franchisee's interest in any lease for the Franchise Location and any equipment used in the operation of the Card My Yard business.
This means that Card My Yard has significant rights to seize and control various assets of the franchisee's business in the event of default or termination, which could have serious financial implications for the franchisee. A prospective franchisee should carefully consider these provisions and seek legal counsel to fully understand the potential risks.