Does Card My Yard require the transferee to assume all obligations of the franchise agreement?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
ns, 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.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, a transferee is required to assume all obligations of the franchise agreement. Specifically, the transferee must enter into a written agreement that assumes full, unconditional, joint, and several liability for all obligations, covenants, and agreements under the existing franchise agreement from the date of the transfer.
This requirement means that the person or entity buying the Card My Yard franchise essentially steps into the shoes of the original franchisee. They become responsible for fulfilling all the duties and responsibilities outlined in the original franchise agreement. This protects Card My Yard by ensuring that the new franchisee is fully accountable for maintaining the standards and obligations of the franchise system.
In addition to assuming the obligations, the transferee must also execute Card My Yard's then-current form of franchise agreement, which will supersede the original agreement. This new agreement's term will end on the original agreement's expiration date, including any renewal terms. While the terms may differ, 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. This ensures that the Card My Yard franchise maintains consistent standards and practices across all its locations while providing some financial consideration to the incoming franchisee.
Furthermore, the original franchisee remains liable for all obligations incurred prior to the transfer date and must maintain a one-year tail on their insurance policies to cover any liabilities from that period. This protects Card My Yard from potential issues related to the previous franchisee's actions or inactions. The transfer process also requires the transferor to execute a general release of any claims against Card My Yard and its affiliates, ensuring a clean break and preventing future legal disputes.