If Clean Your Dirty Face purchases the premises, are they entitled to customary warranties?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the option to purchase your Business and the Premises (if you or one of your affiliates owns the Premises) upon the occurrence of a Termination Event (as defined below). We may exercise this option by giving you written notice within thirty (30) days after the date of the Termination Event. We have the unrestricted right to assign this option to purchase. If we purchase your Business and/or the Premises, we are entitled to all customary warranties and representations in our asset purchase, including representations and warranties as to ownership and condition of and title to assets; liens and encumbrances on assets; validity of contracts and agreements; and liabilities affecting the assets, contingent or otherwise.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Clean Your Dirty Face Franchise Disclosure Document, Clean Your Dirty Face has the option to purchase the franchisee's business and premises if a termination event occurs. A termination event includes the franchisee terminating the agreement, Clean Your Dirty Face terminating the agreement for any reason, or the agreement's term expiring.
If Clean Your Dirty Face exercises its option to purchase the business and/or premises, the franchise agreement stipulates that Clean Your Dirty Face is entitled to all customary warranties and representations in the asset purchase agreement. These warranties and representations include assurances regarding the ownership and condition of assets, title to assets, liens and encumbrances on assets, the validity of contracts and agreements, and any liabilities affecting the assets.
This clause protects Clean Your Dirty Face by ensuring they receive standard legal protections when buying a franchise location. It confirms that the franchisee must provide accurate information and guarantees about the business and property being sold, which is a typical practice in business acquisitions to mitigate risks for the buyer.
For a prospective franchisee, this means that if they decide to sell their Clean Your Dirty Face location back to the company, they will be expected to provide standard warranties about the business's condition and legal standing. This could involve potential liabilities if the franchisee has misrepresented any aspect of the business during the sale.