What is the definition of 'Surviving Obligations' in the context of a Clean Your Dirty Face franchise transfer?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon consummation of the Transfer, the Original Agreement will automatically terminate effective as of the Transfer Date. After the Transfer Date, the provisions of the Original Agreement shall be of no further force or effect; provided, that nothing in this Consent will be deemed to terminate or release the Transferor Parties from any of the following obligations (together, the "Surviving Obligations"): (i) any obligations under the Original Agreement that, either expressly or by their nature, survive termination thereof (including, post-
termination restrictive covenants, indemnification, dispute resolution, non-disparagement, confidentiality provisions, and the obligation to cease using any proprietary trademarks); (ii) any obligations arising prior to the Transfer Date (including any obligations to pay any amounts to Franchisor accruing prior to the Transfer Date); (iii) any failure to perform, improper performance, or other breach, default or violation by any Transferor Party of the Original Agreement; or (iv) any obligations of the Transferor Parties under this Consent. The Original Guaranty shall remain in force and effect and shall serve as a guaranty of the Surviving Obligations, and Transferor Guarantors acknowledge and agree that Franchisor may seek any available remedies against them for the failure of any Transferor Party to comply with any Surviving Obligations.
Source: Item 23 — RECEIPTS (FDD pages 54–186)
What This Means (2025 FDD)
According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, 'Surviving Obligations' refer to specific responsibilities that the transferring franchisee (Transferor Parties) remains liable for even after the franchise is transferred to a new owner (Transferee). These obligations persist despite the termination of the original franchise agreement upon the transfer date.
The 'Surviving Obligations' include any responsibilities under the original agreement that, either explicitly or by their nature, are meant to continue after termination. This includes post-termination restrictive covenants, indemnification, dispute resolution, non-disparagement, and confidentiality provisions, as well as the obligation to stop using Clean Your Dirty Face's proprietary trademarks.
Furthermore, 'Surviving Obligations' encompass any debts or duties that arose before the transfer date, such as unpaid amounts owed to Clean Your Dirty Face. They also cover any failures in performance, breaches, defaults, or violations of the original agreement by the transferring franchisee. The original guaranty provided by the Transferor Parties remains in effect to secure these 'Surviving Obligations,' meaning Clean Your Dirty Face can pursue remedies against the original guarantors if the transferring franchisee fails to meet these obligations.