What actions must the executor, personal representative, or guardian of a deceased or incapacitated Ledgers franchisee take to avoid termination of the franchise agreement?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
7.7. Death or Incapacity
A. Definition
The term "incapacity" means a condition that prevents you from reasonably carrying out your duties under this Agreement for thirty (30) consecutive days.
B. Transfer
We may terminate this Agreement unless, within sixty (60) days of your death or incapacity, your executor, personal representative or guardian:
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- seeks a transfer of your rights under this Agreement;
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- completes the transfer within six (6) months of your death or incapacity;
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- pays all monies owed to us, including the transfer fee, and
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- signs the then-current transfer and release form
C. New Franchisee
The Transferee(s) must:
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- meet the requirements of Section 7.8 entitled Transferee Requirements.
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- complete Initial Training, and
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- enter into a new Franchise Agreement on the then-current form.
D. Interim Services
An interim operator must meet the Transferee Requirements as defined in Section 7.8 except such interim operator may not enter into a new Franchise Agreement. We are entitled to reimbursement from you or your estate for any reasonable expenses incurred continuing Services from the date of your death or incapacity until transfer or termination, plus 10% of Gross Revenues for the period in which we operate or assist in the operation of the Franchised Business.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, in the event of a franchisee's death or incapacity, their executor, personal representative, or guardian must take specific actions to prevent the termination of the franchise agreement. Incapacity is defined as a condition preventing the franchisee from fulfilling their duties for 30 consecutive days.
Within 60 days of the franchisee's death or incapacity, the executor, personal representative, or guardian must seek a transfer of the franchisee's rights under the agreement. The transfer must be completed within six months of the death or incapacity. All monies owed to Ledgers, including the transfer fee, must be paid. Additionally, the executor, personal representative, or guardian must sign the then-current transfer and release form.
The transferee must meet specific requirements, including fulfilling the standard transferee criteria outlined in Section 7.8 of the franchise agreement, completing initial training, and entering into a new franchise agreement based on the then-current form. During the interim period, an operator must meet the transferee requirements, but does not need to enter into a new franchise agreement. Ledgers is entitled to reimbursement from the franchisee's estate for reasonable expenses incurred while continuing services from the date of death or incapacity until the transfer or termination, plus 10% of gross revenues for the period in which Ledgers operates or assists in the operation of the franchised business.