What is the minimum earnest money deposit required when selling a Golden Krust Caribbean Restaurant?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
If you (or any of your owners) at any time determine to sell, assign or transfer for consideration an interest in this Agreement and the Restaurant or an ownership interest in you, you (or such owner) agree to obtain a good faith, executed written oral offer and earnest money deposit (in the amount of five percent (5%) or more of the offering price) from a responsible and fully disclosed offeror.
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to the 2024 Golden Krust Caribbean Restaurant Franchise Disclosure Document, if a franchisee decides to sell their restaurant, they must obtain a written offer and an earnest money deposit from a potential buyer. The minimum earnest money deposit required is five percent (5%) of the offering price.
This deposit requirement ensures that the offer is serious and that the potential buyer is committed to the purchase. It also provides some financial protection to the franchisee during the sale process. Golden Krust Caribbean Restaurant also retains the right of first refusal, meaning they have the option to purchase the franchise themselves under the same terms and conditions as the offer from the third party.
If Golden Krust Caribbean Restaurant exercises its right of first refusal, they can substitute cash for any proposed form of payment and are given at least 60 days to prepare for closing. The franchisee must also provide customary representations and warranties to Golden Krust Caribbean Restaurant, similar to what would be expected in a standard business sale. This clause protects the brand and ensures a smooth transition if the franchisee decides to sell.