What happens to contracts for services to be provided after the termination date of my Face Foundrie franchise?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Promptly, and in no event more than three (3) days after the termination or expiration of this Agreement, provide to Franchisor any and all information Franchisor requests regarding events, products or services to be provided by Franchisee or the Facial Bar after the date of expiration or termination, and at Franchisor's option, Franchisee will either (i) pay to Franchisor any amounts it has received from customers for events or products or services to be provided after the date of termination or expiration, and assign to Franchisor or its designee any contracts or related agreements to such events, products or services, or (ii) return such amounts to customers directly as well as any termination fees or penalties under such contracts.
Nothing herein will obligate Franchisor to take assignment of any obligations of Franchisee under any such contracts or relieve Franchisee of any liability for its obligations to customers or third parties after the termination or expiration of this Agreement;
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to the 2025 Face Foundrie Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, the franchisee must provide Face Foundrie with all information regarding events, products, or services to be provided by the franchisee or the Facial Bar after the termination or expiration date. Face Foundrie then has the option to either receive payment from the franchisee for amounts received from customers for these future events, products, or services, along with an assignment of the related contracts, or require the franchisee to return these amounts directly to the customers.
This means that if a Face Foundrie franchisee has pre-booked appointments or sold service packages that extend beyond the termination date of the franchise agreement, the franchisee will need to account for these obligations. Face Foundrie has the right to take over these contracts and receive the associated revenue, or they can instruct the franchisee to refund the customers. This ensures a smooth transition for customers and protects Face Foundrie's brand reputation.
However, the FDD also states that Face Foundrie is not obligated to assume any of the franchisee's obligations under these contracts, nor does it relieve the franchisee of liability to customers or third parties after termination. Therefore, even if Face Foundrie takes assignment of the contracts, the franchisee may still be responsible for ensuring the services are fulfilled or for handling any customer disputes that arise after the termination date. It is important for a prospective franchisee to understand these potential liabilities and discuss them with Face Foundrie during their due diligence.
In summary, while Face Foundrie retains control over contracts extending beyond the termination date, the franchisee may still bear some responsibility for those contracts. This clause aims to protect both the brand and the customers during and after a franchise termination, but franchisees should be aware of their potential ongoing obligations.