Which exhibits must a transferee of a Dryer Vent Squad franchise execute?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
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- (2) All accrued monetary obligations of Franchisee and all other outstanding obligations to Franchisor and/or Franchisor's affiliates under this Agreement and the Ancillary Agreements must be satisfied in a timely manner, and Franchisee must satisfy all trade, supplier, and vendor accounts and other debts, of whatever nature or kind, in a timely manner;
- (3) Franchisee and each Owner must not be in default or material breach of this Agreement or the Ancillary Agreements;
- (4) The transferee shall be bound by all terms and conditions of this Agreement, and each owner of the transferee shall personally execute the Franchise Owner Agreement and Individual Guaranty in the form attached to this Agreement as Exhibit 1;
- (5) All obligations of Franchisee under this Agreement and the Ancillary Agreements shall be assumed by the transferee, and each individual owner of transferee in a manner satisfactory to Franchisor;
- (6) Franchisee, and each Owner must execute the General Release attached to this Agreement as Exhibit 6 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;
Source: Item 23 — RECEIPTS (FDD pages 51–207)
What This Means (2024 FDD)
According to Dryer Vent Squad's 2024 Franchise Disclosure Document, a transferee must execute specific exhibits as part of the transfer process. Each owner of the transferee company must personally execute the Franchise Owner Agreement and Individual Guaranty, which is attached to the Franchise Agreement as Exhibit 1. Additionally, the franchisee and each owner must execute a General Release, which is Exhibit 6, releasing Dryer Vent Squad from any claims that occurred on or before the transfer date.
Depending on the nature of the transfer, Dryer Vent Squad may require the transferee to execute the then-current standard form franchise agreement offered to new franchisees, along with any other agreements the franchisor deems necessary. This requirement is triggered if the transfer involves the Dryer Vent Squad franchise agreement, substantially all of the assets of the franchised business, a controlling interest in the franchisee, or a series of transfers that collectively meet these criteria. These agreements would supersede the original agreement, although they must maintain the same Royalty Fee, Advertising Contributions, and other financial obligations.
These requirements ensure that the new franchisee owners are bound by the same obligations and standards as the original franchisee. The General Release protects Dryer Vent Squad from potential liabilities related to the previous owner's operation of the franchise. The possibility of needing to sign a new franchise agreement means that the transferee needs to be prepared to adhere to the current standards and requirements for new Dryer Vent Squad franchisees, which may differ from the terms of the original agreement.