After Card My Yard transfers the Franchise Agreement, who is responsible for obligations arising after the transfer?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. By Us. We will have the right to transfer or assign this Agreement and all or any part of our rights or obligations under this Agreement to any person or legal entity without your consent, and upon such transfer or assignment, the transferee or assignee shall be solely responsible for all our obligations arising subsequent to the transfer or assignment. Without limitation of the foregoing, we may sell our assets to a third party; may offer our securities privately or publicly; may merge with or, acquire other corporations, or may be acquired by another corporation; may undertake a refinancing, recapitalization, leveraged buyout or other economic or financial restructuring.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, if Card My Yard transfers or assigns the Franchise Agreement, the responsibility for obligations arising after the transfer falls solely on the transferee or assignee. This means that once Card My Yard transfers the agreement to another party, that new party becomes fully responsible for all obligations from that point forward.
This clause gives Card My Yard significant flexibility in its business operations, allowing it to sell assets, undergo mergers, or engage in financial restructuring without needing the franchisee's consent. The franchisee should be aware that their agreement could be transferred to a completely different entity, and Card My Yard will no longer be responsible for its obligations.
For a prospective franchisee, this highlights the importance of carefully evaluating the long-term prospects and stability of Card My Yard. While the initial agreement is with Card My Yard, the actual fulfillment of the franchisor's obligations could be handled by an unknown third party in the future. It would be prudent to inquire about the likelihood of such a transfer and the criteria Card My Yard would use to select a transferee.