What aspects of the transfer must Crawlspace Medic approve?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
ithout our consent, which we will not unreasonably withhold. |
| Section in | |||
|---|---|---|---|
| Franchise | |||
| Provision | Agreement | Summary | |
| m. | Conditions for franchisor approval of a transfer | Section 16.3 and 16.4 | Conditions include: our decision not to exercise our right of first refusal; transferee meets our then-current standards for qualifying franchisees; transferee signs our then-current form of Franchise Agreement, which may have materially different terms from your Franchise Agreement; transferee successfully complete our Initial Training Program; you have paid us and third-party creditors all amounts owed; you and the transferee sign a General Release in the form of Exhibit C to the Franchise Agreement; you shall subordinate any claims you have against the transferee to us; you will indemnify us for a period of 3 years following the transfer; our approval of the material terms and conditions of the transfer; payment of a transfer fee equal to sixty percent (60%) of the then current franchise fee for a transfer to an individual or entity that is new to the brand, or forty percent (40%) of the then current franchise fee for a transfer to an existing owner within the system, or $1,500 for a transfer between existing owner or adding a new shareholder that does not change the majority ownership, or no payment for a transfer to a spouse, parent or child upon death or permanent disability of the current Franchisee. |
| n. o. | Franchisor's right of first refusal to acquire franchisee's business Franchisor's option to purchase franchisee's business | Section 16.6 Section 18.2 | You must promptly notify us of any written offer to purchase your Franchise. We have 30 days to exercise our first right to buy it on the same terms and conditions, provided that (a) we may substitute cash for any other consideration (b)we may pay the entire purchase price at closing, (c) our credit is deemed as good as the proposed purchaser, (d) we have at least 60 days to close and (e) you shall give us all customary seller's representations and warranties. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 33–38)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, any transfer of interest in the Franchise Agreement, the Franchised Business, its assets, or the Franchisee (if a business entity) requires Crawlspace Medic's approval. However, Crawlspace Medic states that it will not unreasonably withhold consent for a transfer.
Crawlspace Medic's approval of a transfer is conditional on several factors. These include Crawlspace Medic declining to exercise its right of first refusal, the transferee meeting Crawlspace Medic's standards for franchisees, and the transferee signing the current Franchise Agreement, which may have different terms than the original agreement. The transferee must also complete the Initial Training Program.
Additional conditions for transfer approval include the franchisee paying all outstanding amounts to Crawlspace Medic and third-party creditors, both the franchisee and transferee signing a General Release, and the franchisee subordinating any claims against the transferee to Crawlspace Medic. The franchisee must also indemnify Crawlspace Medic for three years post-transfer. Crawlspace Medic must approve the material terms of the transfer, and a transfer fee must be paid. The transfer fee is sixty percent (60%) of the current franchise fee for new individuals or entities, forty percent (40%) for existing owners, $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 the franchisee's death or permanent disability.