What obligations does the entity assume when a Clean Your Dirty Face franchise agreement is transferred to it?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
success, or a waiver of any claims we have against you (or your owners) or of our right to demand the transferee's full compliance with this Agreement.
12.D. TRANSFER TO A WHOLLY-OWNED ENTITY.
Notwithstanding Section 12.C above, if you are in full compliance with this Agreement, you may transfer this Agreement to an Entity in which you maintain management control, and of which you own and control one hundred percent (100%) of the equity and voting power of all issued and outstanding ownership interests; provided, that such Entity (i) will own all of your Business's assets and will conduct all business of your Business; and (ii) will conduct no business other than your Business and, if applicable, the business of other CYDF Facial Bars we have approved. The Entity must expressly assume all of your obligations under this Agreement.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, when a franchisee transfers their Franchise Agreement to a wholly-owned entity, that entity must expressly assume all of the franchisee's obligations under the agreement. This means the entity takes on all the responsibilities and duties that the original franchisee had.
However, the original franchisee is not released from their obligations. The franchisee remains personally liable under the Franchise Agreement even after the transfer, as if the transfer never occurred. The franchisee must also sign a consent to assignment and assignment form that is satisfactory to Clean Your Dirty Face, which may include a general release of any and all claims against Clean Your Dirty Face and its owners, officers, directors, employees, and agents.
In addition, Clean Your Dirty Face requires the franchisee to provide all organizational documents for the entity. This ensures that Clean Your Dirty Face has complete information about the entity taking over the franchise and can verify that the transfer meets their requirements. This is a fairly standard practice in franchising, as franchisors want to ensure that any new entity operating under their brand meets their standards and is fully accountable for the franchise's performance.