What payments must be current before Clean Your Dirty Face approves a transfer?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
- (13) if you or your owners finance any part of the purchase price, you and/or your owners agree that all of the transferee's obligations under promissory notes, agreements, or security interests reserved in your Business are subordinate to the transferee's obligation to pay Royalties, Marketing Fund Contributions, and other amounts due to us, our affiliates, and third-party vendors related to the operation of your Business and to comply with 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, before a franchise can be transferred, all financial obligations to Clean Your Dirty Face, its affiliates, and third-party vendors must be current. Specifically, the franchisee must be up-to-date on Royalty payments, Marketing Fund Contributions, and any other amounts due.
This requirement ensures that Clean Your Dirty Face maintains a financially stable franchise system and that the new franchisee isn't burdened with the previous owner's debts to Clean Your Dirty Face. It also protects the interests of Clean Your Dirty Face and its vendors by ensuring they receive all outstanding payments before the transfer is finalized.
Furthermore, if the franchisee or their owners finance any part of the purchase price, they must agree that the transferee's obligations to pay Royalties, Marketing Fund Contributions, and other amounts due to Clean Your Dirty Face, its affiliates, and third-party vendors take precedence over any obligations to the seller under promissory notes or security interests. This subordination clause is a common practice in franchising to safeguard the franchisor's revenue stream and maintain the integrity of the franchise system. This condition is designed to protect Clean Your Dirty Face's financial interests and ensure the continued operation of the franchise system under the new owner.