What is the exception to the termination of the Original Agreement for a Clean Your Dirty Face franchise?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
Transfer Date"), including any representation or warranty that is not true as of the Effective Date or the Transfer Date, Franchisor's consent to the Transfer may be withdrawn, and any transfer that occurs thereafter, of any kind, including the Transfer, shall be deemed an unauthorized transfer under the terms of the Original Agreement.
-
- Termination of Original Agreement. 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.
Source: Item 23 — RECEIPTS (FDD pages 54–186)
What This Means (2025 FDD)
According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, the Original Agreement will automatically terminate upon the consummation of a transfer, effective as of the Transfer Date. However, this termination does not release the Transferor Parties from certain obligations, referred to as the "Surviving Obligations."
The Surviving Obligations include any obligations under the Original Agreement that, either expressly or by their nature, survive termination. These encompass post-termination restrictive covenants, indemnification, dispute resolution, non-disparagement, confidentiality provisions, and the obligation to cease using any proprietary trademarks. Additionally, any obligations arising prior to the Transfer Date, such as obligations to pay amounts to Clean Your Dirty Face accruing before the Transfer Date, are also considered Surviving Obligations.
Furthermore, the termination does not release the Transferor Parties from any failure to perform, improper performance, or other breach, default, or violation of the Original Agreement. The Original Guaranty remains in effect, guaranteeing the Surviving Obligations, and Clean Your Dirty Face may pursue remedies against the Transferor Guarantors if any Transferor Party fails to comply with these Surviving Obligations. This ensures that certain responsibilities and liabilities continue even after the Original Agreement is terminated due to a transfer.