Is the assignment agreement binding on the successors-in-interest of the Creative World School franchisee?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
- The following is added to the end of the "Summary" sections of Item 17(c), titled "Requirements for franchisee to renew or extend," and Item 17(m), entitled "Conditions for franchisor approval of transfer":
However, to the extent required by applicable law, all rights you enjoy and any causes of action arising in your favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this proviso that the non-waiver provisions of General Business Law Sections 687.4 and 687.5 be satisfied.
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
Based on the 2025 Creative World School Franchise Disclosure Document, there is no explicit mention regarding whether the assignment agreement is binding on the successors-in-interest of the franchisee. However, the FDD does provide information regarding the conditions for franchisor approval of a transfer. Specifically, for New York franchisees, the FDD states that all rights enjoyed and any causes of action arising in the franchisee's favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force. The FDD specifies that this is intended to satisfy the non-waiver provisions of General Business Law Sections 687.4 and 687.5.
This suggests that while the agreement itself may contain clauses regarding assignment and its binding nature, certain state laws, such as those in New York, may provide additional protections or stipulations that could affect how the assignment is enforced, especially concerning the franchisee's rights and causes of action. The language regarding non-waiver provisions implies that successors-in-interest might retain certain rights or claims that cannot be waived by the original franchisee's agreement.
To fully understand the implications for successors-in-interest, a prospective Creative World School franchisee should seek clarification from the franchisor regarding the specific terms of the assignment agreement and how they apply to successors-in-interest in their particular state. Additionally, consulting with a legal professional experienced in franchise law is advisable to ensure a comprehensive understanding of their rights and obligations under both the franchise agreement and applicable state laws.