According to the Crawlspace Medic FDD, what constitutes a 'transfer' by the franchisee?

According to Crawlspace Medic's 2024 Franchise Disclosure Document, attempting a transfer in violation of the Franchise Agreement can result in termination of the agreement.

Specifically, the FDD outlines conditions for franchisor approval of a transfer. Crawlspace Medic's approval is needed, and they have the right of first refusal to acquire the franchisee's business. If Crawlspace Medic decides not to exercise their right of first refusal, the transferee must meet the then-current standards for qualifying franchisees and sign the then-current form of the Franchise Agreement, which may have materially different terms from the original agreement. The transferee must also successfully complete the Initial Training Program.

Additionally, before a transfer can be approved, the franchisee must have paid all outstanding amounts owed to Crawlspace Medic and third-party creditors. Both the franchisee and the transferee must sign a General Release. The franchisee must subordinate any claims against the transferee to Crawlspace Medic and indemnify Crawlspace Medic for three years following the transfer. Crawlspace Medic must also approve the material terms and conditions of the transfer. A transfer fee is required, which is sixty percent of the then-current franchise fee for a new owner, forty percent for an existing owner, $1,500 for transfers between existing owners or adding a new shareholder that does not change majority ownership, and no payment for transfers to a spouse, parent, or child upon death or permanent disability of the current franchisee.

These stipulations are typical in franchising to ensure brand consistency and protect the franchisor's interests during ownership changes. A prospective Crawlspace Medic franchisee should carefully consider these conditions and associated costs, as well as the potential for materially different terms in a new franchise agreement, before deciding to sell their franchise.