Is a redemption of ownership interests considered a transfer for Cd One Price Cleaners?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
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;
Source: Item 23 — Receipts (FDD pages 72–263)
What This Means (2025 FDD)
According to Cd One Price Cleaners' 2025 Franchise Disclosure Document, a redemption of ownership interests is considered a transfer. The FDD specifies that the term "transfer" includes various events, and explicitly lists a redemption of ownership interests as one of them. This falls under the broader category of actions requiring the franchisor's prior written approval.
For a prospective Cd One Price Cleaners franchisee, this means that if the franchisee intends to redeem ownership interests, it is classified as a transfer and requires the franchisor's approval. This approval is subject to meeting the requirements outlined in Article 12 of the franchise agreement. Failing to obtain the franchisor's approval for such a transaction would constitute a breach of the agreement.
This requirement ensures that Cd One Price Cleaners maintains control over the ownership and management structure of its franchises. It allows them to assess the implications of changes in ownership and ensure that any new or remaining owners meet their standards. Franchisees should be aware of this requirement and plan accordingly when considering changes to their ownership structure.