When does the Original Agreement terminate for 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, the Original Agreement between the franchisor and the transferring franchisee automatically terminates upon the consummation of the transfer. This termination is effective as of the Transfer Date, meaning the date on which the transfer of the Clean Your Dirty Face Facial Bar actually occurs. After this Transfer Date, the Original Agreement is considered to be of no further force or effect. However, certain obligations of the transferring franchisee survive the termination of the Original Agreement.
These surviving obligations include any responsibilities under the Original Agreement that, either explicitly or by their nature, are meant to continue after termination. Examples of these include post-termination restrictive covenants, indemnification, dispute resolution, non-disparagement, confidentiality provisions, and the obligation to cease using any proprietary trademarks. Additionally, any obligations that arose before the Transfer Date, such as unpaid amounts owed to Clean Your Dirty Face, also remain in effect. Any failure to perform, improper performance, or other breach of the Original Agreement by the transferring franchisee also survives the termination.
Furthermore, the obligations of the transferring parties under the Consent to Transfer agreement itself also survive. To ensure these surviving obligations are met, the Original Guaranty remains in effect, allowing Clean Your Dirty Face to pursue remedies against the transferring franchisee's guarantors if the transferring franchisee fails to comply with any of these surviving obligations. This ensures that even after the franchise is transferred, certain responsibilities and liabilities from the original agreement continue to be enforceable.