Does the Deck Medic franchisor's definition of 'transfer' include the grant of a mortgage?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
| k. | "Transfer" by franchisee definition | 14.B. | A transfer means and includes, whether voluntary or involuntary, conditional or unconditional, direct or indirect: (a) an assignment, sale, gift, transfer, pledge or sub franchise; (b) the grant of a mortgage, charge, lien or security interest, including, without limitation, the grant of a collateral assignment; (c) a merger, consolidation, exchange of shares or other ownership interests, issuance of additional ownership interests or securities representing or potentially representing ownership interests, or redemption of ownership interests; and (d) a sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any holder of ownership interests or to control the operations or affairs of Franchisee. |
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Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 34–39)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, the definition of 'transfer' by the franchisee includes the grant of a mortgage. Specifically, the definition encompasses a variety of actions, whether voluntary or involuntary, conditional or unconditional, and direct or indirect.
This broad definition includes not only traditional sales or assignments but also the grant of a mortgage, charge, lien, or security interest. This also extends to collateral assignments. This means that if a Deck Medic franchisee seeks to obtain financing by using the franchise as collateral, it would be considered a transfer under the terms of the Franchise Agreement.
Because the grant of a mortgage is considered a transfer, Deck Medic requires prior written consent from the franchisor. This consent can be granted or withheld at the franchisor's discretion. Therefore, a franchisee needs to get approval from Deck Medic before granting a mortgage, charge, lien, or security interest.