What is the role of the 'Transferor' 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 Closet Storage Concepts' 2025 Franchise Disclosure Document, the 'Transferor' in the context of a transfer agreement is not explicitly defined. However, based on the information provided, the 'Transferor' would be the existing franchisee who is transferring their rights and obligations under the Franchise Agreement to a new party, the 'Transferee'.
Several conditions must be met for a transfer to be approved by Closet Storage Concepts. The franchisee must provide the franchisor with a copy of the executed purchase agreement, including the transferee's agreement to assume all of the franchisee's obligations. The transferee must also meet Closet Storage Concepts' managerial and business standards, possess good character and credit, demonstrate the ability to run the business, and have adequate financial resources. The transferee cannot be involved in a business that competes with Closet Storage Concepts, unless they are an existing franchisee.
Additionally, the transferee may be required to execute the then-current Franchise Agreement and complete the training program at their own expense. A transfer fee, equal to 50% of the current Initial Franchise Fee (with a minimum of $24,750), must be paid to Closet Storage Concepts. The franchisee acknowledges that post-termination provisions, including non-competition clauses, will remain in effect even after the transfer. Finally, the transferee must obtain approval from the landlord to take over the lease of the franchised business location.