Is a Ledgers franchisee required to reimburse clients for unrendered services upon termination?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon termination or expiration of this Agreement, including a sale of the Franchise Business, you will:
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- Cease to operate the Franchised Business;
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- Discontinue using any of our "Marks";
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- Cancel all fictitious name filings which you use that includes any of our Marks;
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- Pay to us all amounts owing to us;
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- Reimburse Clients for any fees paid for services not yet rendered;
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- If requested by us, transfer to us all telephone numbers used in relation to this Franchise Business by executing our then current form, and deliver to us written proof of transfer;
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- At our option, and upon our request, use your best efforts to assist in transferring the lease of the facility of your Franchised Business, whether it be through a new lease or assignment;
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- Return to us or certify destruction of any paper and electronic copies of the Manual and any Confidential Information (retaining only such copies as you need for legal or tax purposes);
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- Adhere to the post-term duties stated in Section 8.6 entitled Non-Compete and No Solicitation and any other duties that require your performance after you are no longer a franchisee.
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- At our option, offer to us the right to purchase your furniture, equipment, signage, fixtures, and supplies within thirty (30) days of the date of termination for the adjusted book value, which is the undepreciated book value of the assets on your most recently filed federal tax return prior to the date of the termination or expiration;
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- Abide by any other covenant in this Agreement that requires performance by you after you are no longer a franchisee.
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- Refrain from making disparaging comments in any form about us or our current and former employees, agents, members, directors, or franchisees.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, a franchisee is required to reimburse clients for any fees paid for services that have not yet been provided if the Franchise Agreement is terminated or expires, including if the franchise business is sold. This obligation is part of the franchisee's post-termination duties.
Specifically, upon termination or expiration of the Franchise Agreement, the franchisee must cease operating the franchised business, discontinue using Ledgers's marks, cancel all fictitious name filings that include Ledgers's marks, and pay all outstanding amounts owed to Ledgers. The franchisee must also reimburse clients for any fees they paid for services that haven't been rendered yet.
Additionally, if Ledgers requests, the franchisee must transfer all telephone numbers used in connection with the franchise business and provide written proof of the transfer. At Ledgers's option, the franchisee must also assist in transferring the lease of the facility. The franchisee must return or certify the destruction of all paper and electronic copies of the manual and any confidential information, retaining only copies needed for legal or tax purposes. The franchisee must also adhere to post-term non-compete and non-solicitation duties and any other duties that require performance after they are no longer a franchisee.
Ledgers also has the option to purchase the franchisee's furniture, equipment, signage, fixtures, and supplies within 30 days of termination for the adjusted book value. Finally, the franchisee must refrain from making disparaging comments about Ledgers or its current and former employees, agents, members, directors, or franchisees.