If a Casiola Franchisee's transfer is approved, are they relieved of their obligations under the Franchise Agreement?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
(5) All obligations of Franchisee under this Agreement, the Ancillary Agreements, and all applicable Rental Agreements shall be assumed by the transferee and each individual owner of transferee in a manner satisfactory to Franchisor;
(6) Franchisee and each Owner must execute the General Release attached to this Agreement as Exhibit 5 releasing Franchisor, Franchisor's affiliates and Franchisor's past and present officers, directors, shareholders, members, partners, agents, representatives, independent contractors, servants and employees, of any and all claims against Franchisor for matters arising on, or before, the effective date of the Transfer;
(9) Franchisee and each Owner shall remain liable for all obligations to Franchisor set forth in this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, even after an approved transfer, the franchisee and each owner remain liable for all obligations to Casiola as outlined in the Franchise Agreement.
Specifically, the transferee must assume all obligations under the Franchise Agreement, Ancillary Agreements, and applicable Rental Agreements in a manner satisfactory to Casiola. Additionally, the franchisee and each owner are required to execute a General Release, releasing Casiola and its affiliates from any claims arising on or before the effective date of the transfer.
This means that if a franchisee sells their Casiola franchise, they are still responsible for any outstanding debts or breaches of contract that occurred before the transfer. This condition protects Casiola from potential liabilities and ensures the continued performance of the franchise agreement, even after a transfer of ownership. It is important for prospective franchisees to understand that selling the franchise does not automatically absolve them of past responsibilities.