Under the Closet Storage Concepts Transfer Agreement, who is considered the 'Transferee'?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
e 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;
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to the 2025 Closet Storage Concepts Franchise Disclosure Document, the 'Transferee' in a transfer agreement is the party to whom the franchise is being transferred. Several conditions must be met for the transfer to be approved by Closet Storage Concepts.
Specifically, the transferee must demonstrate to Closet Storage Concepts's satisfaction that they or their designated manager meet the franchisor's managerial and business standards. This includes possessing good moral character, business reputation, and credit rating, as well as the aptitude and ability to conduct the business. The transferee must also have adequate financial resources to meet the performance obligations of the Franchise Agreement.
Furthermore, the transferee cannot be involved in a business that competes with Closet Storage Concepts, unless they are an existing franchisee. The transferee may also be required to execute Closet Storage Concepts's current Franchise Agreement and must complete the training program at their own expense. Additionally, the transferee needs to secure approval from the landlord to take over the lease of the franchised business location. Finally, the franchisee, the transferee, and Closet Storage Concepts must enter into a transfer agreement in the form approved by Closet Storage Concepts.