When transferring a Dq Treat license, what financial obligations must the licensee fulfill?
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.
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 the 2025 Dq Treat FDD, a licensee looking to transfer their license has several financial obligations to fulfill. The licensee must pay all outstanding amounts owed to Dq Treat or its affiliates. This includes any debts the licensee owes to suppliers or landlords for the restaurant premises, especially if Dq Treat or its affiliates have any contingent liability related to those debts.
In addition to settling outstanding debts, the licensee is responsible for ensuring the transferee complies with Dq Treat's current training requirements for DQ® Treat restaurants. This training must be completed at the expense of either the licensee or the transferee. The FDD also mentions that the transfer fee increases by $500 every five years, starting January 1, 2025.
Licensees should also be aware that Dq Treat may require them to prepare and provide financial reports and other data related to the restaurant's operations to help the transferee or Dq Treat evaluate the restaurant and the proposed transfer. Furthermore, if a modernization has not been completed within the past 10 years, the licensee must complete it before the transfer. If a modernization has been completed within the last 10 years, the transferee will be required to complete the next modernization by the date the licensee would have been required to modernize under the agreement. These obligations ensure that the Dq Treat franchise remains in good financial and operational standing during and after the transfer process.