What happens to the original Card My Yard franchise agreement upon transfer?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, when a franchise is transferred, the original franchise agreement is superseded by a new agreement. Specifically, the transferee must execute Card My Yard's then-current form of franchise agreement, which will have a term ending on the original agreement's expiration date, including any renewal terms.
The new franchise agreement takes precedence over the original agreement in all respects, and its terms may differ. However, the fees imposed on the transferee cannot be greater than what Card My Yard imposes on similarly situated transferees. A key benefit for the transferee is that they are not required to pay an initial franchise fee.
This means that a prospective Card My Yard franchisee who purchases an existing franchise will operate under the terms of the franchise agreement in effect at the time of the transfer, not the agreement that the original franchisee signed. This is a common practice in franchising, as it allows the franchisor to update the franchise agreement to reflect changes in the business model, legal requirements, or market conditions. The new franchisee benefits from not having to pay an initial franchise fee, which can be a significant cost savings.