What kind of obligations are considered 'Surviving Obligations' for a Clean Your Dirty Face franchise?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
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 the 2025 Clean Your Dirty Face FDD, 'Surviving Obligations' in the context of a franchise transfer include several key areas. These obligations encompass adherence to restrictive covenants after termination, such as non-disparagement and confidentiality, as well as the continued obligation to protect Clean Your Dirty Face's trademarks.
Additionally, any financial obligations that arose before the transfer date, such as unpaid fees or amounts owed to Clean Your Dirty Face, remain the responsibility of the transferor. This also extends to any breaches or failures to perform under the original franchise agreement by the transferor. The original guaranty provided by the transferor remains in effect to secure these 'Surviving Obligations'.
In practical terms, this means that a franchisee selling their Clean Your Dirty Face location isn't fully released from all responsibilities upon the sale. They continue to be liable for pre-existing debts, past failures to comply with the agreement, and ongoing confidentiality and non-disparagement duties. This ensures that Clean Your Dirty Face can hold the original franchisee accountable for past actions and protect its brand reputation even after the transfer is complete.