Does the Crown Gold Exchange release agreement cover debts?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
agreement and any related documents, which form may contain materially different provisions than this Agreement (provided, however, that the proposed assignee will not be required to pay an initial franchise fee);
- (v) all owners of the proposed assignee provide a guaranty in accordance with Section 2.5;
- (vi) Franchisee has paid all monetary obligations to Crown Gold Franchising and its affiliates, and to any lessor, vendor, supplier, or lender to the Business, and Franchisee is not otherwise in default or breach of this Agreement or of any other obligation owed to Crown Gold Franchising or its affiliates;
- (vii) the proposed assignee and its owners and employees undergo such training as Crown Gold Franchising may require;
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Crown Gold Exchange Franchise Disclosure Document, a general release of Crown Gold Franchising is required from the franchisee, its owners, and the transferee and its owners when transferring the franchise.
Additionally, before a transfer can occur, the franchisee must have paid all monetary obligations to Crown Gold Franchising and its affiliates, as well as to any lessor, vendor, supplier, or lender to the business. The franchisee must not be in default or breach of the Franchise Agreement or any other obligation owed to Crown Gold Franchising or its affiliates.
Crown Gold Franchising may also withhold 25% of the purchase price for 90 days to ensure that all of the franchisee's taxes and other liabilities are paid. If any of the assets are subject to a lien, Crown Gold Franchising can pay a portion of the purchase price directly to the lienholder to pay off such lien. These stipulations protect Crown Gold Exchange from potential liabilities and ensure financial obligations are met during a transfer.