Is the issuance of additional ownership interests considered a transfer for Cd One Price Cleaners?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
pproval 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:
- (a) transfer of record or beneficial ownership of stock or any other ownership interest or right to receive all or a portion of Franchisee's profits or losses or any capital appreciation relating to Franchisee or the Store;
- (b) a merger, consolidation or exchange of ownership interests, or issuance of additional ownership interests or securities representing or potentially representing ownership interests, or a redemption of ownership interests;
- (c) any sale or exchange of voting interests or securities convertible to voting interests, or any management agreement or other agreement granting the right to exercise or control the exercise of the voting rights of any owner or to control Franchisee's or the Store's operations or affairs;
- (d) transfer of an interest in Franchisee, this Agreement, the Operating Assets or the Store (or any right to receive all or a portion of Franchisee's or the Store's profits or losses or any capital appreciation relating to Franchisee or the Store) in a divorce, insolvency or entity dissolution proceeding, or otherwise by operation of law;
- (e) if Franchisee (or one of its owners) dies, transfer of an interest in Franchisee, this Agreement, the Operating Assets or the Store (or any right to receive all or a portion of Franchise's or the Store's profits or losses or any capital appreciation relating to Franchisee or the Store) by will, declaration of or transfer in trust, or under the laws of intestate succession;
Source: Item 23 — Receipts (FDD pages 72–263)
What This Means (2025 FDD)
According to Cd One Price Cleaners' 2025 Franchise Disclosure Document, the issuance of additional ownership interests is considered a transfer. Specifically, the term 'transfer' includes events such as the issuance of additional ownership interests or securities representing potential ownership interests. This means that if a franchisee decides to issue more ownership interests in their Cd One Price Cleaners franchise, it is classified as a transfer under the franchise agreement.
Because the issuance of additional ownership interests is considered a transfer, the franchisee must obtain prior written approval from Cd One Price Cleaners. This requirement allows Cd One Price Cleaners to maintain control over who has ownership in their franchise locations. The franchisor wants to ensure that any new owners meet their standards and qualifications.
This stipulation is important for prospective franchisees to understand, as it affects their ability to raise capital or restructure their business. Any changes to the ownership structure, including issuing new interests, require navigating the transfer approval process with Cd One Price Cleaners, which is designed to protect the integrity and standards of the Cd One Price Cleaners brand.