Can Cd One Price Cleaners transfer its rights or obligations under the Franchise Agreement?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
Therefore, neither Developer nor any of its direct or indirect owners
CD DRA 2025-26 5
may transfer (as defined in the Current Franchise Agreement) this Agreement or any direct or indirect ownership interests in Developer without Franchisor's prior written approval, which Franchisor may grant or withhold for any or no reason. Franchisor may transfer this Agreement or any of Franchisor's direct or indirect ownership interests without restriction.
Source: Item 23 — Receipts (FDD pages 72–263)
What This Means (2025 FDD)
According to the 2025 FDD, Cd One Price Cleaners has the right to transfer the Franchise Agreement or any direct or indirect ownership interests without any restrictions. However, the franchisee faces limitations on transferring the agreement.
The franchisee's rights under the agreement are personal, stemming from Cd One Price Cleaners's assessment of the franchisee's character, skills, business sense, financial stability, and ability to maintain Cd One Price Cleaners's standards. Consequently, the franchisee cannot transfer the agreement or any ownership interests without first obtaining written approval from Cd One Price Cleaners. Cd One Price Cleaners has the discretion to approve or deny such transfer requests.
If a franchisee seeks to transfer a non-controlling ownership interest, Cd One Price Cleaners will not unreasonably withhold approval if the proposed transferee is of good moral character, has no involvement with a competitive business, and meets Cd One Price Cleaners's standards for franchisees. Additionally, the franchisee must pay a non-refundable transfer fee of $1,000, and all new owners must sign a personal guarantee, agreeing to be bound by the franchisee's obligations under the agreement.