Is the transferee required to sign the current Crawlspace Medic Franchise Agreement?
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 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 sign the then-current form of the Franchise Agreement as a condition for the franchisor's approval of a transfer. This new agreement may contain terms that are materially different from the original franchisee's agreement.
This requirement means that anyone buying a Crawlspace Medic franchise from an existing franchisee will not necessarily inherit the terms of the original agreement. Instead, they will be subject to the terms and conditions that Crawlspace Medic is offering to new franchisees at the time of the transfer. These terms could be more or less favorable than those in the original agreement.
As a prospective franchisee, it is important to understand that if you plan to sell your Crawlspace Medic franchise in the future, the potential buyer will need to meet Crawlspace Medic's then-current standards and sign the current Franchise Agreement. This could impact the value of your franchise and the ease of finding a buyer. You should carefully consider this factor when evaluating the franchise opportunity.