If the Crawlspace Medic Franchise Agreement terminates upon death or disability, who is responsible for transferring the franchise?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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. Upon termination of the Franchise Agreement, we have the option to purchase your, equipment, signs, advertising materials, supplies, and inventory at your cost or fair market value, whichever is less. We have the option of purchasing the vehicle for the lesser of its current market value or $5,000.00. |
| p. | Death or disability of franchisee | Sections 16.3, 16.4 and 16.7 | The Franchise Agreement will terminate automatically upon your death or permanent disability, unless prohibited by law and the Franchise is transferred within 6 months to a replacement franchisee that we approve. |
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, the Franchise Agreement will terminate automatically upon the franchisee's death or permanent disability, unless prohibited by law. To avoid termination, the franchise must be transferred within 6 months to a replacement franchisee that Crawlspace Medic approves.
This means that upon the death or permanent disability of a Crawlspace Medic franchisee, their legal representative is responsible for taking action to transfer the franchise to a qualified, approved replacement within six months. If the transfer does not occur within this timeframe or the franchisor does not approve the replacement franchisee, the franchise agreement will terminate.
It is important to note that Crawlspace Medic has the right to approve or disapprove the proposed replacement franchisee. The prospective franchisee must meet Crawlspace Medic's standards. This condition ensures that any new franchisee will maintain the brand's standards and operational procedures. The FDD does not specify who is responsible for finding the replacement franchisee.