What does a Casiola franchisee agree to be bound by regarding substituted or modified terms in the franchise agreement?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
- (7) If the proposed Transfer includes or entails the Transfer of this Agreement, substantially all of the assets of the Franchised Business, a controlling interest in Franchisee, or is one of a series of Transfers which in the aggregate Transfers substantially all of the assets of the Franchised Business or a controlling interest in Franchisee, then, at the election of Franchisor and upon notice from Franchisor to Franchisee, the transferee may be required to execute (and/or, upon Franchisee's request, shall cause all interested parties to execute) for a term ending on the expiration date of the original Term of this Agreement, the then current standard form Franchise Agreement offered to new franchisees of Casiola Businesses and any other agreements as Franchisor requires.
Such agreements shall supersede this Agreement and its associated agreement in all respects, and the terms of Franchisor's then current agreements may differ from the terms in this Agreement, provided that such agreements shall provide for the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations established in this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, a franchisee may be required to have a transferee execute the then-current standard form franchise agreement if the franchise agreement or substantially all of the assets of the franchised business are transferred. This requirement is at Casiola's discretion.
The new agreement would be for a term ending on the original expiration date and would supersede the original agreement in all respects. While the terms may differ, the new agreement must maintain the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations as the original agreement.
This means that if a franchisee sells their Casiola business, the buyer might have to sign a new franchise agreement with potentially different terms than the original franchisee. However, the core financial obligations should remain consistent. This protects Casiola by ensuring that the business operates under current standards while providing some financial stability for the franchisee.