What happens if a Card My Yard franchisee transfers the franchise?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
If you seek to transfer or resell your business, failure to follow this process will incur the then-current termination fees and result in termination of your franchise;
(8) The transferor shall remain liable for all of its obligations to us under this Agreement incurred prior to the effective date of the transfer, shall obtain a one-year tail on each of its insurance policies to cover any liabilities that may have been incurred prior to the effective date of the transfer, and shall execute any and all instruments reasonably requested by us to evidence such liability;
(9) You must pay us a transfer fee in an amount equal to the greater of: (a) $3,000, or (b) 5% of the applicable sale/transfer price (whether for cash or other consideration);
All Transferrees acquiring an existing Card My Yard business from a franchisee must sign our then-current Franchise Agreement within thirty (30) days of approval of the transfer by us, and payment of applicable transfer fee.
(2) You and your Affiliates shall not be in default of this Agreement or any other agreement with us or our Affiliates, and you and they shall have substantially and timely complied with all the terms and conditions of such agreements during their respective terms;
(3) The transferor and its owners,if applicable, shall have executed a general release, in a form satisfactory to us, of any and all claims, against us and our Affiliates, our and their respective officers, directors, shareholders, partners, members, agents, representatives, independent contractors, servants and employees, past and present, in their corporate and individual capacities,including, without limitation, claims arising under this Agreement and any other agreement with us or our Affiliates, and under federal, state or local laws, rules, and regulations or orders;
(4) The proposed transferee must demonstrate to our satisfaction that it meets our then-current qualifications, and, at the transferee's expense, its Principal Owner, General Manager, and any other personnel we require shall complete any training programs then in effect for Card My Yard businesses upon such terms and conditions as we may reasonably require;
(5) The transferee shall, at its expense and within the time period we reasonably require, renovate, modernize and otherwise upgrade the Card My Yard business to conform to our then-current System image, standards and specifications, provided that this subsection XV.B(5) will be applicable only if you have not renovated, updated and upgraded the Card My Yard business pursuant to subsection VIII.D of this Agreement;
(6) The transferee shall enter into a written agreement, in a form satisfactory to us, assuming full, unconditional, joint and several liability for, and agreeing to perform from the date of the transfer, all of your obligations, covenants and agreements under this Agreement;
(7) The transferee shall execute our then-current form of franchise agreement for a term ending on the expiration date of this Agreement (including any renewal terms provided by this Agreement).
The new franchise agreement shall supersede this Agreement in all respects and its terms may differ from the terms of this Agreement (except that the fees imposed on the transferee will not be greater than the fees that we then impose on similarly situated transferees), provided that the transferee shall not be required to pay an initial franchise fee.
If the transferee is a corporation, partnership, limited liability company or other entity, those of the transferee's owners whom we require shall execute such guaranty and assumption documents as we may require.
- (10) If the transfer relates to the grant of a security interest in any of your assets, we may require the secured party to agree that, in the event of any default by you under any documents related to the security interest, we shall have the right and option (but no obligation) to be substituted as obligor to the secured party and to cure any default.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, a franchisee seeking to transfer their business must adhere to a specific process, and failure to do so will result in termination of the franchise and incur the then-current termination fees. The transferor remains liable for all obligations to Card My Yard incurred before the transfer date and must obtain a one-year tail on their insurance policies to cover any prior liabilities. The transferor must also execute any instruments reasonably requested by Card My Yard to evidence this liability.
As part of the transfer, Card My Yard requires a transfer fee equal to the greater of $3,000 or 5% of the sale/transfer price. The proposed transferee must meet Card My Yard's current qualifications, and key personnel must complete any required training programs at the transferee's expense. The transferee is also responsible for renovating and upgrading the Card My Yard business to meet the current system standards, if applicable. The transferee must sign Card My Yard's then-current Franchise Agreement within thirty (30) days of approval of the transfer by Card My Yard, and payment of applicable transfer fee.
The transferee must enter into a written agreement assuming full liability for all obligations under the existing Franchise Agreement. They must also execute the then-current form of the franchise agreement for a term ending on the original agreement's expiration date, which may have different terms, although the fees imposed on the transferee cannot be greater than those imposed on similarly situated transferees. The transferee is not required to pay an initial franchise fee. The transferor and its owners must execute a general release of any claims against Card My Yard and its affiliates. If the transfer involves a security interest in the franchisee's assets, Card My Yard may require the secured party to agree that Card My Yard has the option to become the obligor and cure any default.
If the transferee is a corporation, partnership, limited liability company, or other entity, those of the transferee's owners whom Card My Yard requires must execute guaranty and assumption documents. These measures ensure that Card My Yard maintains control over its brand and standards, even when a franchise changes ownership. Prospective franchisees should carefully consider these requirements and associated costs when planning for a potential future sale of their Card My Yard franchise.