Must a proposed assignee meet Care Plus Medical Ucc's standards for new franchisees?
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. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing Care Plus Medical UCC at least 60 days prior notice of the proposed Transfer, and without obtaining Care Plus Medical UCC's consent. In granting any such consent, Care Plus Medical UCC may impose conditions, including, without limitation, the following:
- (i) Care Plus Medical UCC receives a transfer fee equal to $10,000 plus any broker fees and other out-of-pocket costs incurred by Care Plus Medical UCC;
- (ii) the proposed assignee and its owners have completed Care Plus Medical UCC's franchise application processes, meet Care Plus Medical UCC's then-applicable standards for new franchisees, and have been approved by Care Plus Medical UCC as franchisees;
- (iii) the proposed assignee is not a Competit
Source: Item 22 — CONTRACTS (FDD page 41)
What This Means (2024 FDD)
According to Care Plus Medical Ucc's 2024 Franchise Disclosure Document, if a franchisee wishes to transfer their franchise to another party, the proposed assignee must meet Care Plus Medical Ucc's standards for new franchisees. Specifically, the proposed assignee and their owners must complete Care Plus Medical Ucc's franchise application processes and be approved by Care Plus Medical Ucc as franchisees. This requirement ensures that any new operator of a Care Plus Medical Ucc franchise meets the franchisor's criteria for business skill, financial capacity, and overall suitability.
This condition is one of several that Care Plus Medical Ucc may impose when granting consent to a transfer. Other conditions include paying a transfer fee of $10,000 plus any broker fees and out-of-pocket costs incurred by Care Plus Medical Ucc, ensuring the assignee is not a competitor, and requiring the assignee to execute Care Plus Medical Ucc's current franchise agreement, which may have different terms than the original agreement. However, the proposed assignee will not be required to pay an initial franchise fee.
For a prospective Care Plus Medical Ucc franchisee, this means that if they ever decide to sell their franchise, finding a buyer who meets Care Plus Medical Ucc's approval is crucial. The pool of potential buyers may be limited to those who can satisfy Care Plus Medical Ucc's standards, which could affect the sale price and the ease of transferring the franchise. Franchisees should be aware of these transfer conditions and factor them into their long-term business plans.