Under what conditions can Deck Medic acquire the assets of my franchise?
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, the franchisor has the option to require a transferee to execute the current standard form franchise agreement if the transfer includes substantially all of the assets of the franchised business. This can also occur if the transfer involves a controlling interest in the franchisee, or if it is one of a series of transfers that, in total, transfer substantially all assets or a controlling interest.
If Deck Medic exercises this option, the new agreement will supersede the original franchise agreement. While the new agreement must maintain the same Royalty Fee, Advertising Contributions, and other financial obligations, the other terms may differ. This means that while your core financial obligations remain consistent, other aspects of the franchise agreement could change upon transfer if Deck Medic chooses to enforce this clause.
In the event of a transfer, the transferee is responsible for upgrading the administrative office to meet Deck Medic's current standards. The transferee must also complete any required training programs. Additionally, the franchisee, each owner, and each spouse remain liable for all obligations to Deck Medic as outlined in the original agreement. The franchisee must also pay Deck Medic a $10,000 transfer fee.