What financial information should the Transferee of a Closet Storage Concepts franchise rely on?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
As you know, you and CLOSETS UNLIMITED OF NEW JERSEY, INC., a New Jersey corporation ("Franchisor") are entering into a Franchise Agreement (the "Franchise Agreement") for the operation of a Closet & Storage Concepts business (the "Franchised Business"). The purpose of this Questionnaire is to determine whether any statements or promises were made to you by employees or authorized representatives of the Franchisor, or by employees or authorized representatives of a broker acting on behalf of the Franchisor that have not been authorized, or that were not disclosed in the Disclosure Document or that may be untrue, inaccurate or misleading. The Franchisor, through the use of this document, desires to ascertain (a) that the undersigned, individually, and as a representative of any legal entity established to acquire the franchise rights, fully understands and comprehends that the purchase of a franchise is a business decision, complete with its associated risks, and (b) that you are not relying upon any oral statement, representations, promises or assurances during the negotiations for the purchase of the franchise which have not been authorized by Franchisor.
In the event that you are intending to purchase an existing Franchised Business from an existing Franchisee, you may have received information from the transferring Franchisee, who is not an employee or representative of the Franchisor. The questions below do not apply to any communications that you had with the transferring Franchisee. Please review each of the following questions and statements carefully and provide honest and complete responses to each.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to the 2025 Closet Storage Concepts Franchise Disclosure Document, a potential transferee of a Closet Storage Concepts franchise should not rely on unauthorized statements or promises made during negotiations for the purchase of the franchise. Specifically, the Disclosure Questionnaire included as Exhibit 7 in the FDD aims to determine if any unauthorized, untrue, inaccurate, or misleading statements were made by Closet Storage Concepts employees or representatives, or by brokers acting on their behalf.
The questionnaire emphasizes that purchasing a franchise is a business decision with associated risks and that the transferee should not rely on any oral statements, representations, promises, or assurances not authorized by Closet Storage Concepts. This is particularly relevant if the transferee is purchasing an existing franchised business from a transferring franchisee, as the transferring franchisee is not an employee or representative of Closet Storage Concepts.
Therefore, a transferee should primarily rely on the information provided in the Franchise Disclosure Document and any written agreements or statements authorized by Closet Storage Concepts. They should complete the Disclosure Questionnaire honestly to ensure they are not basing their decision on any unverified or unauthorized information. This helps protect both the transferee and Closet Storage Concepts by ensuring that all parties are operating under the same understanding of the franchise agreement and its terms.