What section of the Chem Dry Franchise Agreement defines 'transfer' by the franchisee?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| Franchise | ||
| Agreement and | ||
| other agreements | ||
| confidential information, use of non | ||
| Chem-Dry cleaning solutions two or | ||
| more times, non-compliance with laws, | ||
| repeated defaults, bankruptcy related | ||
| events, termination of another franchise | ||
| agreement | ||
| i. | Section | Pay |
| Your | 16 | outstanding |
| obligations | of | amounts, |
| on | the | de |
| termination/nonrenewal | Franchise Agreement, | identification, and return of confidential |
| Section 9 of the | information, telephone numbers, | |
| Equipment Agreement | customer lists, proprietary equipment | |
| and Section 13 of the | and operating manuals (see also "s.") | |
| Software | ||
| License | ||
| Agreement | ||
| j. Assignment of contract | Section 13A of the | No restriction on CDI's right to assign |
| by us | Franchise | |
| Agreement | ||
| and the Business Note | ||
| k. "Transfer" by you – | Section 13B of the | Includes transfer of equity, the Franchise |
| definition | Franchise Agreement, | Agreement or the Business assets |
| Section | ||
| 5 | ||
| of | ||
| the | ||
| Equipment Agreement | ||
| and Section 18 of the | ||
| Software | ||
| License | ||
| Agreement | ||
| l. CDI's approval of | Section 13B | We have the right to approve all |
| transfer by you | transfers, | |
| our | ||
| consent | ||
| not | ||
| to | ||
| be | ||
| unreasonably withheld |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 51–55)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, Section 13B of the Franchise Agreement, Section 5 of the Equipment Agreement, and Section 18 of the Software License Agreement define what constitutes a 'transfer' by the franchisee. This definition includes the transfer of equity, the Franchise Agreement itself, or the business assets.
This is an important definition for prospective Chem Dry franchisees because it clarifies what actions are considered a transfer requiring franchisor approval. Transferring any of these aspects of the business without approval could result in a breach of the franchise agreement.
Chem Dry retains the right to approve all transfers, and their consent will not be unreasonably withheld. This protects Chem Dry's interests by ensuring that any new franchisee meets their standards and is capable of operating the business effectively. It also provides some assurance to the franchisee that Chem Dry will not arbitrarily deny a legitimate transfer request.