Is the Transfer Agreement for Closet Storage Concepts a legally binding contract?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.3.2.9 Franchisee acknowledges and agrees that the post-termination provisions of this Agreement including, without limitation, the noncompetition provisions, shall survive the transfer of the Franchise and Franchisor, Franchisee and the transferee enter into a transfer agreement in the form approved by Franchisor.
A copy of Franchisor's current form is attached as Exhibit 9 hereto.
- 7.3.2.10 The Transferee demonstrates it has received approval from the landlord to take over possession of the Franchised Business' lease.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, a transfer agreement is required when a franchisee transfers their franchise. Specifically, the FDD states that the franchisee, franchisor, and the transferee must enter into a transfer agreement in the form approved by Closet Storage Concepts.
For a Closet Storage Concepts franchisee, this means that if they decide to sell their franchise, all parties involved (the franchisee selling, the new franchisee buying, and Closet Storage Concepts itself) must sign a transfer agreement. This agreement ensures that the transfer is conducted according to Closet Storage Concepts' standards and protects the interests of all parties. The FDD also mentions that a copy of the Franchisor's current form is attached as Exhibit 9.
Additionally, the original franchisee acknowledges and agrees that the post-termination provisions of the Franchise Agreement, including non-competition clauses, will remain in effect even after the transfer. This protects Closet Storage Concepts by preventing the former franchisee from competing with the brand after selling their franchise. The transferee must also demonstrate they have received approval from the landlord to take over possession of the Franchised Business' lease.