Can Casa De Corazon assign the franchise contract?
Casa_De_Corazon Franchise · 2025 FDDAnswer from 2025 FDD Document
| Section in | ||
|---|---|---|
| Franchise, Development Agreement, or Other | ||
| Provision | Agreements | Summary |
| a. Length of the franchise term | Franchise Agreement - Section 2(a) Development Agreement - Section 5 | 10 years. Expires on date when last Center under the Development Schedule opens, or should have opened, for business, or the Development Agreement is terminated (subject to applicable state law). |
| b. Renewal or extension of the term | Franchise Agreement - Section 2(b) Development Agreement - None | If you are in good standing and you meet our conditions, you can renew your franchise for an additional 10-year period. There are no renewal rights under the Development Agreement. |
| c. Requirements for you to renew or extend | Franchise Agreement - Section 2(c) Development Agreement - None | Give written notice, sign new franchise agreement (which may contain materially different terms and conditions than your original Franchise Agreement); upgrade your Center and update your equipment to comply with then-current standards; provide us with evidence of property control; sign general release, subject to applicable state law; pay renewal fee. Not Applicable |
| d. Termination by you | Franchise Agreement - Section 21(f) Development Agreement - None Section in Franchise, Development Agreement, or Other | You may terminate on 10 days’ notice to us, if you are in compliance with the Franchise Agreement and we materially breach the agreement and fail to cure the breach within 30 days after you give us notice of the breach. You may not terminate (subject to applicable state law). |
| Provision | Agreements | Summary |
| v. Choice of forum | Franchise Agreement - Section 22(b) and (e) Development Agreement - Section 7(d) | Mediation to be held in a metropolitan area with a population of at least 250,000 people that is not located within 200 miles of your Center or our principal office. In most cases, litigation must be brought in the state or federal courts located in Hennepin County, Minnesota, except as provided in a state specific addendum. Subject to state law, mediation to be held in accordance with requirements of franchise agreement. |
| w. Choice of law | Franchise Agreement - Section 25(a) Development Agreement - Section 9(c) | Subject to state law, Minnesota law generally applies. Subject to state law, Minnesota law generally applies. |
| Provision | Section in Franchise, Development Agreement, or Other Agreements Development Agreement - Section 7 | |
| i. | Your obligations on termination/non-renewal | Franchise Agreement - Section 21(c) Development Agreement - Section 7 |
| j. | Assignment of contract by | Franchise Agreement - |
| us | Section 18(a) Development Agreement - Section 4(a) |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–43)
What This Means (2025 FDD)
According to Casa De Corazon's 2025 Franchise Disclosure Document, Item 17 details the franchisor's ability to assign the franchise agreement. Specifically, Section 18(a) of the Franchise Agreement and Section 4(a) of the Development Agreement outline the terms under which Casa De Corazon can assign the contract. This means that Casa De Corazon retains the right to transfer its obligations and rights under the agreement to another party.
For a prospective franchisee, this clause signifies that the relationship they initially establish with Casa De Corazon could potentially be transferred to a new franchisor. While the FDD doesn't specify the conditions under which Casa De Corazon might assign the agreement, it's important for franchisees to understand that such a transfer is possible. This could lead to changes in management, brand strategy, or support systems, all of which could impact the franchisee's business.
Given this information, it would be prudent for a potential Casa De Corazon franchisee to inquire about the circumstances under which the franchisor might consider assigning the franchise agreement. Understanding the potential triggers and implications of such a transfer can help a franchisee prepare for and adapt to any changes that may arise during the term of their franchise agreement.