What happens to sums owed to Card My Yard and its affiliates upon termination?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, upon termination of the franchise agreement, franchisees are required to promptly pay all sums owed to Card My Yard and its affiliates. This obligation extends to any damages, costs, and expenses, including reasonable attorneys' fees and costs, incurred by Card My Yard due to any default by the franchisee. This also includes costs associated with Card My Yard obtaining injunctive or other relief to enforce the franchise agreement's provisions.
This financial obligation creates a lien in favor of Card My Yard against any and all of the franchisee's assets until all outstanding amounts are paid in full. This means that Card My Yard has a legal claim on the franchisee's assets, which can be used to satisfy the debt.
This requirement is standard in franchise agreements to ensure that the franchisor is compensated for any losses or expenses incurred as a result of the franchisee's default or breach of contract. Prospective franchisees should be aware of this obligation and ensure they understand the potential financial implications of terminating the franchise agreement or defaulting on their obligations.