When purchasing a Golden Krust Caribbean Restaurant, what must happen with the restaurant's licenses and permits?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
At the closing you agree to deliver instruments transferring to us:
- (a) good and merchantable title to the assets purchased, free and clear of all liens and encumbrances (other than liens and security interests acceptable to us), with sales and other transfer taxes paid by you; and
- (b) all licenses and permits of the Restaurant which may be assigned or transferred; and
- (c) the leasehold interest in the Premises and improvements thereon.
If you cannot deliver clear title to all of the purchased assets, or if there are other unresolved issues, the closing of the sale will be accomplished through an escrow. You and your owners further agree to execute general releases, in form satisfactory to us, of any and all claims against us and our shareholders, officers, directors, employees, agents, successors and assigns.
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, when Golden Krust Caribbean Restaurant purchases a restaurant from a franchisee, the franchisee must transfer all assignable and transferable licenses and permits for the restaurant to Golden Krust Caribbean Restaurant. The franchisee is also responsible for paying sales and other transfer taxes related to the transfer of these licenses and permits.
If the franchisee cannot provide a clear title to all purchased assets, including licenses and permits, the closing of the sale will be managed through an escrow account. This ensures that all issues are resolved before the final transfer of ownership. Additionally, the franchisee and their owners must sign general releases, in a form satisfactory to Golden Krust Caribbean Restaurant, to waive any claims against the franchisor and its affiliates.
This requirement ensures that Golden Krust Caribbean Restaurant can continue operating the restaurant without interruption and that all legal and regulatory requirements are met. The use of an escrow account provides a safeguard for both parties, ensuring a smooth and legally sound transfer of the business.