Under what conditions does Card My Yard test for impairment of goodwill?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Directly or indirectly divert, or attemptto divert, any business or customer of Card My Yard businesses to any competitor, or do or perform any other act injurious or prejudicial to the goodwill associated with the Marks and the System.
(b) Except with respect to Card My Yard businesses operated under valid agreements with us, own, maintain, operate, engage in, or have any financial or beneficial interest in, advise, assist or make loans to, any business that is the same as or similar to a Card My Yard business (including any business that offers yard greeting services or other celebratory display items or services of any kind, including but not limited to, balloon displays, lighted displays, etc.) which is, or is intended to be, located (i) at the Franchise Location, (ii) within the Protected Area, (iii) within a twenty-five (25)-mile radius of the Franchise Location, or (iv) within a twenty-five (25) mile radius of the location of any Card My Yard business then in existence or under construction.
(a) Directly or indirectly divert, or attemptto divert, any business or customer of Card My Yard businesses to any competitor, or do or perform any other act injurious or prejudicial to the goodwill associated with the Marks and the System.
B. Standards Compliance. You acknowledge the importance of maintaining uniformity among all of the Card My Yard businesses and the importance of complying with all of our standards and specifications relating to the operation of the Card My Yard businesses. To protect the reputation and goodwill of the System and to maintain high standards of operation under the Marks, you agree to conduct your business in accordance with the Manuals, other written directives which we may issue to you from time to time, and any other manuals and materials created or approved for use in the operation of Card My Yard businesses.
C. Credit Standing. You acknowledge that the failure to make payments or repeated delays in making prompt payments to suppliers will result in a loss of credit rating or standing which will be detrimental to the goodwill associated with the Marks and the System. Except for payments which are disputed by you in good faith, you agree to promptly pay when due all amounts owed by you to us, our Affiliates, and other suppliers, lenders, landlords and other third parties. Any failure to comply with this section shall constitute a material default under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
Based on the 2025 Card My Yard Franchise Disclosure Document, several actions or failures on the part of the franchisee can negatively impact the goodwill associated with the Card My Yard brand. Should any of these situations occur, Card My Yard may take action to protect its brand and interests.
Specifically, franchisees must avoid actions that could harm the brand's reputation, such as diverting customers to competitors or engaging in activities that are detrimental to the goodwill of the Card My Yard system. Franchisees must also maintain a good credit standing by making timely payments to suppliers and landlords. Failure to do so could lead to a loss of credit rating, which Card My Yard considers detrimental to its goodwill.
Additionally, Card My Yard emphasizes the importance of maintaining uniformity and compliance with its standards and specifications. Franchisees are expected to operate their businesses according to the manuals and directives provided by the franchisor to protect the brand's reputation and goodwill. Any actions that deviate from these standards or damage the brand's image could potentially trigger a review of the goodwill associated with the franchise.