What standards must the proposed transferee of a Creative World School franchise meet?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
divorce, insolvency or corporate or partnership dissolution proceeding or otherwise by operation of law;
(v) transfer of an interest in you, this Agreement or the School, in the event of your death or the death of one of your owners, by will, declaration of or transfer in trust or under the laws of intestate succession; or
(vi) pledge of this Agreement (to someone other than us) or of an ownership interest in you as security, foreclosure upon the School or your transfer, surrender or loss of possession, control or management of the School.
15.03 Conditions for Approval of Transfer. If you (and your owners) are in full compliance with this Agreement then we will approve a transfer that meets all the applicable requirements of this Section. The proposed transferee and its direct and indirect owners must be individuals of good character and otherwise meet our then applicable standards for School franchisees. A transfer of ownership, possession or control of the School may be made only in conjunction with a transfer of this Agreement. If the transfer is of this Agreement or a controlling interest in you, or is one of a series of transfers which in the aggregate constitute the transfer of this Agreement or a controlling interest in you, all of the following conditions must be met prior to or concurrently with the effective date of the transfer:
- (a) the transferee has sufficient business experience, aptitude and financial resources to Construct (if necessary) and operate the School;
- (b) you have paid all Royalties, Marketing Fund contributions, amounts owed for purchases from us and all other amounts owed to us or to third-party creditors and have submitted all required reports and statements;
- (c) the transferee (or its Manager) and its managerial employee (if different from your manager) have agreed to complete our standard training program;
- (d) the transferee has agreed to be bound by all of the terms and conditions of this Agreement;
- (e) you or the transferee pay us a t
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
According to the 2025 Creative World School FDD, if a franchisee wishes to transfer their franchise, the proposed transferee must meet several conditions to gain approval from Creative World School. The transferee and their direct/indirect owners must be of good character and meet the standards Creative World School has in place for new franchisees at the time of the transfer. A transfer of ownership can only occur alongside a transfer of the franchise agreement itself.
To be approved, the transferee must demonstrate sufficient business experience, aptitude, and financial resources to construct (if necessary) and operate the Creative World School. The current franchisee must have paid all outstanding royalties, marketing fund contributions, amounts owed for purchases, and any other debts to Creative World School or third-party creditors, and have submitted all required reports. The transferee (or its Manager) and its managerial employee (if different from the current manager) must agree to complete Creative World School's standard training program.
The transferee must agree to be bound by all the terms and conditions of the existing franchise agreement. Either the current franchisee or the transferee must pay Creative World School a transfer fee equal to the greater of $20,000 or 25% of the then-current initial franchise fee. This fee includes the cost of training the transferee and their managerial personnel. The current franchisee must also execute a general release of any claims against Creative World School.
Finally, Creative World School must approve the material terms and conditions of the transfer, ensuring that the price and payment terms will not negatively impact the transferee's operation of the school. These conditions are typical in franchising to ensure brand consistency and the continued success of the franchise system under new ownership.