What is the role of the 'Transferee' in the Closet Storage Concepts Transfer Agreement?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
ims against Franchisor and its affiliates and their officers, directors, equity owners, agents, employees, attorneys and accountants in their corporate and individual capacities; provided, however, the release shall not release any liability specifically provided for by any applicable state statute regulating franchising. Our current
form or release is attached to this Agreement as Exhibit "5";
- 7.3.2.4 Franchisee has provided Franchisor a copy of the executed purchase agreement relating to the proposed transfer with all supporting documents and schedules, including transferee's assumption of and agreement to discharge all of Franchisee's obligations under this Agreement;
- 7.3.2.5 The transferee has demonstrated to Franchisor's satisfaction that transferee or its designated manager meets Franchisor's managerial and business standards; possesses a good moral character, business reputation and credit rating; has the aptitude and ability to conduct the business to be transferred; and has adequate financial resources and capital to meet the performance obligations of this Agreement; however, transferee shall not be in the same business as Franchisor either as licensor, franchisor, independent operator or licensee of any other business, chain or network which is similar in nature or in competition with Franchisor or Closet & Storage Concepts System franchisees, except that the transferee may be an existing franchisee of Franchisor;
- 7.3.2.6 The transferee has executed Franchisor's then-current Franchise Agreement, at Franchisor's option;
- 7.3.2.7 Franchisee or transferee has paid Franchisor a transfer fee equal to 50% of the then current Initial Franchise Fee, subject to a minimum of $24,750;
- 7.3.2.8 The transferee and its manager shall complete Franchisor's training program to Franchisor's satisfaction at the transferee's own expense within the time frame set forth by Franchisor; and
- 7.3.2.9 Franchisee acknowledges and agrees that the post-termination provisions of this Agreement including, without limitation,
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to the 2025 Closet Storage Concepts FDD, the 'Transferee' is the party to whom a Closet Storage Concepts franchise is being transferred. The transferee must meet several requirements to be approved by Closet Storage Concepts. The transferee needs to demonstrate managerial and business standards to Closet Storage Concepts' satisfaction. They must also possess a good moral character, business reputation, and credit rating, as well as the aptitude and ability to conduct the business. Adequate financial resources and capital to meet the performance obligations of the Franchise Agreement are also required.
The transferee cannot be in the same business as Closet Storage Concepts, either as a licensor, franchisor, independent operator, or licensee of any other business, chain, or network that is similar in nature or in competition with Closet Storage Concepts or its franchisees, unless they are an existing Closet Storage Concepts franchisee. The transferee may also be required to execute Closet Storage Concepts' then-current Franchise Agreement, at Closet Storage Concepts' option.
Furthermore, either the franchisee or the transferee must pay Closet Storage Concepts a transfer fee equal to 50% of the then-current Initial Franchise Fee, subject to a minimum of $24,750. The transferee and its manager must also complete Closet Storage Concepts' training program to Closet Storage Concepts' satisfaction at the transferee's own expense within the timeframe set by Closet Storage Concepts. The transferee must also demonstrate that it has received approval from the landlord to take over possession of the Franchised Business' lease.
Finally, the franchisee, franchisor, and the transferee must enter into a transfer agreement in the form approved by Closet Storage Concepts, and the post-termination provisions of the Franchise Agreement, including non-competition provisions, will survive the transfer of the franchise.