What happens to a Ledgers franchisee's obligations if the agreement expires?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
ity to Cure**
We may terminate this Agreement, if the following conditions remain within thirty (30) days after sending you notice and an opportunity to cure:
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- You violate any other term or condition of this Agreement, the Franchisee Operations Manual, or any other agreement with us; or
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- Any amount owing to us from you is more than 30 days past due.
8.4. No Refund of Initial Fee
We have no obligation to return or refund any fee to you upon termination or expiration of this Agreement.
8.5. Post Termination Obligations
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.
8.6. Non-Compete and No Solicitation
A. Post-Term.
You will not, during the Term and for a period of two (2) years after expiration or termination of this Agreement ("Restriction Period"), in the Territory or within twenty-five (25) miles of the boundaries of the Territory ("Restricted Market"), own or manage any business that provides prospective clients advisory, compliance, recordkeeping, payroll, or tax services ("Restricted Activities"). This restriction applies even if you sell your Franchise Business**.**
B. No Solicitation
During the Restriction Period, you will not directly or indirectly provide advisory, compliance, recordkeeping, payroll, or tax services to any Client, except through the Franchise Business.
C. Disparagement
During the Restricted Period, you will avoid intentional conduct that leads any existing Client or vendor to modify their relationship to the harm of the Franchise Business.
8.7. Waiver of Bond
If we are forced to bring suit to enforce any sections of this Agreement, you will waive any requirement that we post bond to obtain a temporary or permanent injunction to enforce these duties.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, upon the expiration of the Franchise Agreement, a franchisee has several obligations. The franchisee must cease operating the franchised business and discontinue using any of Ledgers's marks. They also need to cancel any fictitious name filings that include Ledgers's marks and pay all outstanding amounts owed to Ledgers.
Additionally, the franchisee is required to reimburse clients for any fees paid for services that have not yet been rendered. If Ledgers requests, the franchisee must transfer all telephone numbers used in connection with the franchise business and provide written proof of the transfer. The franchisee must also use their best efforts to assist in transferring the lease of the facility, if requested by Ledgers. Furthermore, the franchisee must return or certify the destruction of all paper and electronic copies of the manual and any confidential information, retaining only necessary copies for legal or tax purposes.
The franchisee must adhere to post-term duties related to non-compete and non-solicitation agreements, as well as any other duties that require performance after the franchisee is no longer part of the Ledgers system. At Ledgers's option, the franchisee must offer Ledgers the right to purchase furniture, equipment, signage, fixtures, and supplies within thirty days of the expiration date, at 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.
Ledgers also requires the franchisee to assign the telephone number to them upon expiration or termination of the agreement. The franchisee will pay all amounts owed in connection with the Listings, and to immediately at Franchisor's request take any other action as may be necessary to transfer the Listings to Franchisor or Franchisor's designated agent, install and maintain, at Franchisee's sole expense, an intercept message, in a form and manner acceptable to Franchisor on any or all of the Listings, disconnect the Listings, and/or cooperate with Franchisor or its designated agent in the removal or relisting of the Listings. Franchisor may require Franchisee to "port" or transfer to Franchisor or an approved call routing and tracking vendor all Listings.