Can the Devon Creek Franchisor assign its rights and remedies under the agreement?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
16. TRANSFERS
16.1 Transfers by Franchisor.
- 16.1.1 Franchisor shall have the right to assign this Agreement, and all of Franchisor's rights and privileges hereunder, to any person, firm, corporation or other entity, without Franchisee's permission or prior knowledge, provided that, with respect to any assignment resulting in the subsequent performance by the assignee of Franchisor's obligations, the assignee shall expressly assume and agree to perform Franchisor's obligations hereunder.
Specifically, and without limitation to the foregoing, Franchisee expressly affirms and agrees that Franchisor may: (i) sell Franchisor's assets and Franchisor's rights to the Marks and the System outright to a third party; (ii) engage in a public or private placement of some or all of Franchisor's securities; (iii) merge, acquire other corporations, or be acquired by another corporation, including competitors; (iv) undertake a refinancing, recapitalization, leveraged buy-out or other economic or financial restructuring; and (v) with regard to any or all of the above sales, assignments and dispositions, Franchisee expressly and specifically waives any claims, demands or damages arising from or relating to the loss of association with or identification of Franchisor.
Nothing contained in this Agreement shall require Franchisor to remain in the business franchised herein or to offer the same products and services, whether or not bearing the Marks, in the event that Franchisor exercises its prerogative hereunder to assign Franchisor's rights in this Agreement.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, Devon Creek has the right to assign the Franchise Agreement and all associated rights and privileges to another entity without needing the franchisee's permission or prior knowledge. However, if the assignment results in the assignee performing Devon Creek's obligations, the assignee must expressly agree to fulfill those obligations.
Devon Creek is allowed to sell its assets and rights to the Marks and System, engage in public or private placements of securities, merge with or acquire other corporations (including competitors), and undertake financial restructuring. The franchisee specifically waives any claims or damages related to the loss of association with Devon Creek due to these actions.
This means that a Devon Creek franchisee could find themselves operating under a new franchisor with potentially different management styles, business strategies, or support systems. While the new franchisor must assume Devon Creek's obligations, the franchisee's relationship and expectations may change significantly. Devon Creek is not required to remain in the franchised business or offer the same products and services if it assigns its rights under the agreement.