In the context of a Deck Medic franchise, what is considered a 'Transfer' that requires notification and consent?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
- (6) Franchisee, each Owner, and each Spouse must execute the General Release attached to this Agreement as Exhibit 5 releasing Franchisor, Franchisor's affiliates and Franchisor's past and present officers, directors, shareholders, members, partners, agents, representatives, independent contractors, servants and employees, of any and all claims against Franchisor for matters arising
on, or before, the effective date of the Transfer;
- (7) If the proposed Transfer includes or entails the Transfer of this Agreement, substantially all of the assets of the Franchised Business, a controlling interest in Franchisee, or is one of a series of Transfers which in the aggregate Transfers substantially all of the assets of the Franchised Business or a controlling interest in Franchisee, then, at the election of Franchisor and upon notice from Franchisor to Franchisee, the transferee may be required to execute (and/or, upon Franchisee's request, shall cause all interested parties to execute) for a term ending on the expiration date of the original Term of this Agreement, the then current standard form Franchise Agreement offered to new franchisees of Deck Medic Businesses and any other agreements as Franchisor requires. Such agreements shall supersede this Agreement and its associated agreement in all respects, and the terms of Franchisor's then current agreements may differ from the terms in this Agreement, provided that such agreements shall provide for the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations established in this Agreement;
- (8) The transferee, at its expense, must improve, modify, refurbish, renovate, remodel, and/or otherwise upgrade Franchisee's non-residential Administrative Office to conform to the then current standards and specifications of Franchisor, and the transferee must complete such improvements, modifications, refurbishments, renovations, remodeling, and/or upgrading within the time period Franchisor reasonably specifies;
- (9) Franchisee, each Owner, and each Spouse shall remain liable for all obligations to Franchisor set forth in this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 43–228)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, a 'Transfer' requiring franchisor notification and consent includes several scenarios. These include transferring the Franchise Agreement itself, substantially all of the assets of the franchised Deck Medic business, or a controlling interest in the franchisee. The document also specifies that a series of transfers that, in aggregate, result in the transfer of substantially all assets or a controlling interest also constitute a transfer requiring approval.
If a proposed transfer meets these criteria, Deck Medic has the option to require the transferee to execute the then-current standard Franchise Agreement for new franchisees, which would supersede the original agreement. This new agreement would maintain the same Royalty Fee, Advertising Contributions, and other financial obligations as the original. The transferee is also responsible for upgrading the administrative office to meet Deck Medic's current standards within a timeframe specified by the franchisor.
Furthermore, the franchisee, owners, and spouses remain liable for all obligations to Deck Medic as outlined in the original agreement, even after the transfer. The transferee must also complete any required training programs for Deck Medic franchisees. A transfer fee of $10,000 is required to be paid to Deck Medic. These conditions ensure that Deck Medic maintains control over its brand standards and financial interests during and after a transfer.