What requirements must a transferee meet to be approved by Dq Treat?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
consent to a proposed transfer, Company will return the transfer fee to Licensee, minus any actual expenditures or disbursements made by Company in direct connection with evaluating or processing the proposed transfer, together with an itemized statement of these costs. The transfer fee is not refundable in whole or in part except as expressly stated in this agreement.
- (F) Payment of Amounts Owed. All amounts owed by Licensee to Company or any of Company's affiliates, Licensee's suppliers, or any landlord for the Restaurant premises and Authorized Location, or upon which Company or any of Company's affiliates have any contingent liability, must be paid in full.
- (G) Compliance with Agreement. Licensee must be in full compliance with the terms of this agreement, including providing Company with all reports required in sections 9.9 and 9.10 through the effective date of the transfer.
- (H) Guarantee. All Owners of transferee must sign Company's then current form of undertaking and guarantee. In addition, if Company allows Licensee or an Owner to retain a security or other financial interest in this agreement or the Restaurant after the transfer, then Licensee and the Owner must guarantee the performance of this agreement until the security or other financial interest terminates.
- (I) General Release. Licensee, each Owner, and each guarantor must sign a general release of all claims arising out of or relating to this agreement, Licensee's Restaurant, or the parties' business relationship, in the form designated by Company, releasing Company and its affiliates.
- (J) Training. The transferee must, at Licensee's or transferee's expense, comply with Company's then current training requirements for DQ® Treat restaurants.
- (K) Financial Reports and Data. Company may require Licensee to prepare and furnish to transferee or Company financial reports and other data relating to the Restaurant and its operations as Company deems reasonably necessary or appropriate for transferee or Company to evaluate the Restaurant and the proposed transfer. Company may confer with proposed transferees and furnish them with information concerning the Restaurant and proposed transfer without being held liable to Licensee, except for intentional misstatements made to a
proposed transferee. Any information furnished by Company to proposed transferees is for the sole purpose of permitting the transferees to evaluate the Restaurant and proposed transfer and will not be construed in any manner or form whatsoever as financial performance representations or claims of success or failure.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, a transferee must meet several requirements to be approved. The transferee must comply with Dq Treat's then-current training requirements for DQ® Treat restaurants, and all owners of the transferee must sign Dq Treat's current form of undertaking and guarantee. The transferee is also required to sign Dq Treat's current operating agreement, which may contain materially different terms and conditions, potentially including higher or additional fees.
Additionally, the franchisee (the seller) must complete any outstanding repairs, maintenance, and similar items that Dq Treat specifies in writing for the restaurant. If the restaurant hasn't been modernized within the past 10 years, the franchisee must complete this modernization before the transfer. If modernization has occurred within the last 10 years, the transferee will need to complete the next modernization by the date the franchisee would have been required to do so under the original agreement.
Furthermore, the franchisee (seller), each owner, and each guarantor must sign a general release of all claims against Dq Treat and its affiliates. The franchisee must also ensure that all outstanding amounts owed to Dq Treat, its affiliates, suppliers, or the landlord are paid in full. The franchisee must be in full compliance with the terms of the agreement, including providing all required reports through the effective date of the transfer. Finally, the franchisee (and each owner) must sign an agreement to observe the post-termination covenant not to compete and other applicable post-termination obligations.