What standards must a transferee meet to qualify as a Crawlspace Medic franchisee?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
--------------------------------| | | | 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 transfe
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, a transferee must meet several standards to be approved as a franchisee. Crawlspace Medic must decide not to exercise their right of first refusal, meaning they decline the opportunity to buy the franchise themselves. The transferee must then meet Crawlspace Medic's current standards for new franchisees, which likely include financial qualifications, business experience, and other criteria.
Additionally, the transferee is required to sign Crawlspace Medic's then-current form of Franchise Agreement. This new agreement may contain terms that are significantly different from the original franchisee's agreement, potentially impacting the transferee's rights and obligations. The transferee must also successfully complete Crawlspace Medic's Initial Training Program to ensure they are proficient in the brand's operating standards and procedures.
Furthermore, before the transfer can be finalized, the current franchisee must have paid all outstanding amounts owed to Crawlspace Medic and any third-party creditors. Both the current franchisee and the transferee must sign a General Release, releasing Crawlspace Medic from any claims. The current franchisee must also subordinate any claims they have against the transferee to Crawlspace Medic, and indemnify Crawlspace Medic for three years following the transfer. Approval of the material terms and conditions of the transfer by Crawlspace Medic is also required.
Finally, the transferee must pay a transfer fee. The amount of this fee depends on the nature of the transfer. It is sixty percent (60%) of the then-current franchise fee if the transferee is new to the Crawlspace Medic brand, forty percent (40%) of the then-current franchise fee if the transferee is an existing owner within the Crawlspace Medic system, or $1,500 for a transfer between existing owners or adding a new shareholder that does not change the majority ownership. No transfer fee is required for a transfer to a spouse, parent, or child upon the death or permanent disability of the current franchisee.