Must the transferee in a Deck Medic franchise transfer agree to be bound by the terms of the Franchise Agreement?
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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| l. | Franchisor's approval of transfer by franchisee | 14.B. | Transfers require our prior written consent, which may be granted or withheld in our discretion. |
| m. | Conditions for franchisor's approval of transfer | 14.C. | For approval of your transfer, you must provide us with 30 days prior written notice of the proposed transfer; you and your Owners must not have defaulted in your obligations under the Franchise Agreement and all other agreements with us; you and your Owners must be in compliance with your obligations under the Franchise Agreement and all other agreements with us; the transferee must agree to be bound by all of the terms and provisions of the Franchise Agreement; the transferee's owners and their spouses must personally guarantee all of the terms and provisions of the Franchise Agreement; you and your Owners and their spouses must sign a general release in favor of us; the transfer must provide for the assignment and/or ownership of the approved location for the Franchised Business, and the transferee's continued use and occupancy of such location throughout the term of the Franchise Agreement; the assets of the Franchised Business must be transferred to the transferee; the transferee and the transferee's owners and managers, at the transferee's expense, must complete our training programs; we waive our right of first refusal; we approve of the transfer and transferee in writing and subject to our discretion; and you pay the Transfer Fee (subject to applicable state laws). |
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, a condition for the franchisor's approval of a franchise transfer is that the transferee must agree to be bound by all the terms and provisions of the Franchise Agreement. This requirement ensures that the new franchisee is legally obligated to uphold the standards, practices, and financial commitments outlined in the original agreement.
This condition is a standard practice in franchising, designed to protect the Deck Medic brand and maintain consistency across all franchise locations. Additionally, the transferee's owners and their spouses must personally guarantee all the terms and provisions of the Franchise Agreement. This adds an extra layer of security for Deck Medic, ensuring that the financial and operational responsibilities are taken seriously by the new ownership.
Furthermore, to gain approval for the transfer, the franchisee must provide Deck Medic with 30 days prior written notice of the proposed transfer. The franchisee and their owners must not be in default of their obligations under the Franchise Agreement and all other agreements with Deck Medic, and they must be in compliance with these obligations. The current franchisee and their owners and spouses must also sign a general release in favor of Deck Medic. These stipulations ensure that the transfer occurs smoothly and that Deck Medic's interests are protected during the transition.