Does the definition of 'transfer' for Cd One Price Cleaners include a direct assignment?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee understands and acknowledges that Franchisor has granted the rights set forth in this Agreement in reliance on the business skill, financial capacity and personal character of Franchisee or, in the case of a business entity Franchisee, the owner(s) of any direct or indirect interest in Franchisee. Accordingly, neither: (i) this Agreement (or any interest in this Agreement); (ii) the Store (or any right to receive all or a portion of the Store's profits or losses or any capital appreciation relating to the Store); (iii) all or substantially all of the Operating Assets; nor (iv) any ownership interest in Franchisee (if Franchisee is a business entity) or in any of Franchisee's direct or indirect owners (if they are business entities) may be transferred without Franchisor's prior written approval, which Franchisor will not unreasonably withhold if the transfer meets all of the requirements in this Article 12. A transfer of the Store's and/or the Operating Assets' ownership, possession or control may be made only with a transfer of this Agreement. Any transfer without Franchisor's approval is a breach of this Agreement and has no effect. In this Agreement, the term "transfer" includes any voluntary, involuntary, direct or indirect assignment, sale, gift or other disposition and includes, without limitation, the following events:
Source: Item 23 — Receipts (FDD pages 72–263)
What This Means (2025 FDD)
According to Cd One Price Cleaners' 2025 Franchise Disclosure Document, the term "transfer" includes a direct assignment. Cd One Price Cleaners requires that franchisees obtain prior written approval from the company before any transfer of interest. This requirement is based on the company's reliance on the franchisee's business skill, financial capacity, and personal character.
The definition of "transfer" is broad, covering both voluntary and involuntary actions. It encompasses not only the agreement itself but also the store's assets, profits, and ownership interests. This means that any change in ownership or control, whether direct or indirect, falls under the transfer restrictions outlined in the franchise agreement.
For a prospective franchisee, this means that exiting the business or changing ownership structure requires Cd One Price Cleaners' approval. Failing to obtain this approval constitutes a breach of the agreement and renders the transfer ineffective. This provision protects Cd One Price Cleaners by ensuring that any new operator meets their standards and maintains the brand's integrity.