Are the obligations of the Closet Storage Concepts franchisee binding on their heirs and assigns?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.2 Death or Disability. In the event of the death, disability or incapacity of any individual Franchisee or officer or director or member of an incorporated Franchisee or limited liability company or partner of a partnership Franchisee, should the decedent's or disabled or incapacitated person's executor, heir or legal representative, or the business entity, as the case may be, wish to continue as Franchisee under this Agreement, such person shall apply for Franchisor's consent, execute the then-current franchise agreement, and complete the training program to Franchisor's satisfaction, as applicable, as in any other case of a proposed transfer of Franchisee's interest in this Agreement. Such assignment by operation of law shall not be deemed in violation of this Agreement, provided the heirs or legatees or business entity meet the conditions imposed by this Agreement and are acceptable to Franchisor.
If Franchisee is a business entity, this Agreement shall continue in effect upon the death of the largest equity owner, provided that the active management of the business entity shall remain stable and reasonably satisfactory to Franchisor in its sole discretion.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts's 2025 Franchise Disclosure Document, the franchise agreement outlines specific procedures in the event of a franchisee's death or disability. If the franchisee, or an officer, director, member of an incorporated franchisee, or partner of a partnership franchisee dies, becomes disabled, or incapacitated, their executor, heir, or legal representative may apply to continue the franchise agreement.
To continue as a Closet Storage Concepts franchisee, the applicant must secure the Franchisor's consent, execute the then-current franchise agreement, and complete the training program to the Franchisor's satisfaction. This process mirrors the requirements for any proposed transfer of the franchisee's interest in the agreement. The agreement specifies that such assignment by operation of law is not a violation of the agreement, provided the heirs, legatees, or business entity meet the conditions imposed by the agreement and are acceptable to the Franchisor.
For a Closet Storage Concepts franchise owned by a business entity, the agreement remains effective upon the death of the largest equity owner, assuming the active management of the business remains stable and reasonably satisfactory to the Franchisor. This clause provides some assurance of continuity, but the Franchisor retains discretion over management quality.
Overall, while the Closet Storage Concepts franchise agreement does allow for transfer to heirs or assigns under certain conditions, the Franchisor maintains significant control over the process. The need for consent, execution of a new agreement, and completion of training ensures that any successor franchisee meets the Franchisor's standards. Prospective franchisees should carefully consider these stipulations and discuss with the Franchisor the practical implications of transferring the franchise in the event of death or disability.