Must all owners of the proposed assignee provide a guaranty to Care Plus Medical Ucc?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
LE 15. TRANSFERS**
- 15.1 By Care Plus Medical UCC. Care Plus Medical UCC may transfer or assign this Agreement, or any of its rights or obligations under this Agreement, to any person or entity, and Care Plus Medical UCC may undergo a change in ownership and/or control, without the consent of Franchisee.
- 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that Care Plus Medical UCC entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability.
Source: Item 22 — CONTRACTS (FDD page 41)
What This Means (2024 FDD)
According to the 2024 Care Plus Medical Ucc Franchise Disclosure Document, when a franchisee seeks to transfer their franchise to a new owner (assignee), Care Plus Medical Ucc may require that all owners of the proposed assignee provide a guaranty. This requirement is outlined as one of the conditions Care Plus Medical Ucc may impose when granting consent for the transfer.
This condition means that each owner of the entity taking over the franchise must personally guarantee the financial and operational obligations of the franchise agreement. This is in accordance with Section 2.5 of the franchise agreement. The guaranty ensures that Care Plus Medical Ucc has recourse to the personal assets of each owner if the franchise fails to meet its obligations.
For a prospective franchisee, this implies that if they plan to sell their franchise in the future, the new owners will need to be willing to provide this personal guarantee. This requirement could affect the pool of potential buyers and the terms of the sale. It is a fairly standard practice in franchising to ensure the financial stability and commitment of new franchise owners.