Does Dryer Vent Squad have the unilateral right to transfer the agreement?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
r without the written consent of Franchisor, or otherwise in violation of this Agreement including, but not limited to this Article 14.B. shall constitute a breach of this Agreement and shall convey to the transferee no rights or interests in this Agreement; and
- (5) In the event of a Transfer of this Agreement that is approved by Franchisor, Franchisee shall not be relieved of Franchisee's obligations under this Agreement whether said obligations accrued and/or arose prior to and/or after the date of Transfer.
14.C. CONDITIONS FOR APPROVAL OF TRANSFER
Provided Franchisee and each Owner, respectively, are in substantial compliance with this Agreement and the Ancillary Agreements, and Franchisor does not elect to exercise Franchisor's right of first refusal as set forth in Article 14.F. below, Franchisor shall not unreasonably withhold its approval of a Transfer by Franchisee or an Owner. The proposed transferee (including such assignee's owner(s) if the proposed transferee is a Corporate Entity) must be of good moral character, have sufficient business experience, aptitude and financial resources to own and operate a Dryer Vent Squad Business, and otherwise meet Franchisor's then applicable standards for franchisees as determined by Franchisor in its sole, but reasonable discretion. Furthermore, the proposed transferee and the proposed transferee's owners may not own or operate, or intend to own or operate, a Competitive Business. Franchisee agrees that Franchisor may condition approval of a Transfer upon Franchisee's satisfaction (either before, or contemporaneously with, the effective date of the Transfer) of the following:
(1) Franchisee must provide written notice to Franchisor of the proposed Transfer of this Agreement at least 30 days prior to the Transfer, and Franchisee must have also satisfied the obligations set forth in Article 14.F. below;
- (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;
Source: Item 23 — RECEIPTS (FDD pages 51–207)
What This Means (2024 FDD)
According to the 2024 Dryer Vent Squad Franchise Disclosure Document, a franchisee cannot transfer their agreement without the franchisor's approval. Specifically, Article 14.C outlines the conditions for approval of a transfer, stating that Dryer Vent Squad will not unreasonably withhold approval if the franchisee and each owner are in substantial compliance with the agreement and Dryer Vent Squad does not exercise its right of first refusal.
To gain approval for a transfer, the proposed transferee must demonstrate good moral character, sufficient business experience, aptitude, and financial resources to operate a Dryer Vent Squad Business. They also cannot own or operate a competitive business. The franchisee must provide written notice to Dryer Vent Squad at least 30 days prior to the transfer and satisfy obligations outlined in Article 14.F.
Additional conditions include satisfying all accrued monetary obligations to Dryer Vent Squad and its affiliates, ensuring that neither the franchisee nor any owner is in default or material breach of the agreement, and ensuring the transferee is bound by all terms and conditions of the agreement. The owners of the transferee must also personally execute the Franchise Owner Agreement and Individual Guaranty.
Furthermore, the franchise agreement can be terminated if the franchisee attempts to transfer the agreement or any rights under it without Dryer Vent Squad's prior approval and written consent, or not in accordance with the agreement.