If Cd One Price Cleaners assigns its obligations, what must the assignee do?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
isor (including the execution of personal guarantees), assuming and agreeing to fulfill all of Franchisee's obligations under this Agreement and all related agreements, or (ii) execute, for a term ending on the expiration of the Term, the form of franchise agreement and any ancillary documents then being offered to new CD Store franchisees (including the execution of personal guarantees); provided, however, that except as provided below, the transferee shall not be required to pay any initial franchise fee;
- 12.3.5 The transferee (and, if the transferee is a business entity, all owners of a beneficial interest in the transferee) shall demonstrate to Franchisor's satisfaction that it (and they) meet Franchisor's educational, managerial and business standards and do not operate or have any direct or indirect interest in any Competitive Business; possess a good moral character (if an individual or if an entity this shall apply to the principal(s) thereof), business reputation, and credit rating; have the aptitude, ability, and requisite financial resources and capital to operate the Store, as may be evidenced by prior related
business experience or otherwise; and that the terms of the proposed transfer do not place an unreasonable financial or operational burden on the transferee;
- 12.3.6 The transferee, at its expense, shall within the time specified by Franchisor, refurbish, remodel or otherwise change the Store's premises and Operating Assets to conform to Franchisor's then current standards and specifications for new CD Stores;
- 12.3.7 The transferor shall remain liable for all of the obligations to Franchisor and its affiliates under this Agreement and any other agreement between Franchisee and Franchisor (or its affiliate) relating to the Store, including any Sublease, whether arising before or after the transfer, and shall execute any and all instruments reasonably requested by Franchisor to evidence such liability;
- 12.3.8 The transferee (and its owners) agree to comply with all applicable post-termination obligations under this Agreement, including, without limitation, Section 15.3;
- 12.3.9 At the transferee's expense, the transferee and those of its employees selected by Franchisor shall successfully complete Franchisor's then current initial training program, including, without limitation, payment of the then current nonrefundable training fee charged by Franchisor;
- 12.3.10 The transferor shall pay a transfer fee equal to Four Thousand Dollars ($4,000) if the transferee (or its owners if the transferee is an entity) is an existing CD Store franchisee, otherwise Eight Thousand Dollars ($8,000). The transferor shall pay to Franchisor a non-refundable initial payment of One Thousand Dollars ($1,000) at the time the transfer request is submitted to Franchisor, with the balance of the transfer fee due to Franchisor upon the closing of the transfer; provided, however, that no transfer fee will be required in connection with a transfer from a sole proprietorship or a partnership to a corporation in which the former proprietor or partners own all of the outstanding stock, or a transfer pursuant to Section 12.5;
Source: Item 23 — Receipts (FDD pages 72–263)
What This Means (2025 FDD)
According to the 2025 FDD, if Cd One Price Cleaners approves a transfer of a franchise, the transferee must meet several requirements. The transferee must demonstrate that they meet Cd One Price Cleaners' educational, managerial, and business standards and not operate or have any direct or indirect interest in any Competitive Business. They must also possess a good moral character, business reputation, and credit rating, and have the aptitude, ability, and requisite financial resources and capital to operate the store. The terms of the proposed transfer cannot place an unreasonable financial or operational burden on the transferee.
Additionally, the transferee, at its expense, must refurbish, remodel, or otherwise change the store's premises and Operating Assets to conform to Cd One Price Cleaners' then-current standards and specifications for new CD Stores within the time specified by Cd One Price Cleaners. The transferee (and its owners) must agree to comply with all applicable post-termination obligations under the Agreement. At the transferee's expense, the transferee and those of its employees selected by Cd One Price Cleaners must successfully complete Cd One Price Cleaners' then-current initial training program, including payment of the then-current nonrefundable training fee charged by Cd One Price Cleaners.
Furthermore, at Cd One Price Cleaners' option, the transferee must either enter into a written assignment, assuming and agreeing to fulfill all of the franchisee's obligations under the Agreement and all related agreements, or execute the form of franchise agreement and any ancillary documents then being offered to new Cd One Price Cleaners franchisees. The transferor must pay a transfer fee equal to $4,000 if the transferee is an existing Cd One Price Cleaners franchisee, otherwise $8,000. The transferor must pay Cd One Price Cleaners a non-refundable initial payment of $1,000 at the time the transfer request is submitted, with the balance of the transfer fee due upon the closing of the transfer.