What financial obligations must remain the same in a new Franchise Agreement offered to a transferee of a Deck Medic franchise?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
- (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;
Source: Item 23 — RECEIPTS (FDD pages 43–228)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, if a transfer of the franchise agreement occurs that involves the transfer of the business's assets, a controlling interest, or a series of transfers that collectively achieve the same, Deck Medic has the option to require the transferee to execute the then-current standard franchise agreement.
While the terms of this new agreement may differ from the original, the new agreement must maintain the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations as the original agreement. This ensures that while other aspects of the franchise agreement might be updated to reflect current standards, the core financial commitments remain consistent for the transferee.
This condition protects Deck Medic's revenue streams and financial structure, ensuring that transfers do not negatively impact the franchisor's income. For a potential transferee, this means understanding that while the franchise agreement might be updated, the fundamental financial obligations will remain the same as those agreed upon in the original agreement. It is important to carefully review both the original agreement and the current standard agreement to fully understand all obligations and potential changes beyond the financial aspects mentioned.