factual

If a Ledgers franchisee sells their franchise, what section of the Franchise Agreement outlines the termination terms?

Ledgers Franchise · 2025 FDD

Answer from 2025 FDD Document

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:

    1. Cease to operate the Franchised Business;
    1. Discontinue using any of our "Marks";
    1. Cancel all fictitious name filings which you use that includes any of our Marks;
    1. Pay to us all amounts owing to us;
    1. Reimburse Clients for any fees paid for services not yet rendered;
    1. 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;
    1. 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;
    1. 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);
    1. 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.
    1. 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;
    1. Abide by any other covenant in this Agreement that requires performance by you after you are no longer a franchisee.
    1. Refrain from making disparaging comments in any form about us or our current and former employees, agents, members, directors, or franchisees.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–41)

What This Means (2025 FDD)

According to Ledgers's 2025 Franchise Disclosure Document, Section 8.5 of the Franchise Agreement outlines the franchisee's obligations upon termination, including a sale of the franchise business. This section specifies that upon termination or expiration of the agreement, the franchisee must cease operating the franchised business and discontinue using Ledgers's marks.

Additionally, the franchisee is required to cancel all fictitious name filings that include any of Ledgers's marks and pay all outstanding amounts owed to Ledgers. They must also reimburse clients for any fees paid for services not yet rendered. If requested by Ledgers, the franchisee must transfer all telephone numbers used in relation to the franchise business and assist in transferring the lease of the business facility.

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. They must also adhere to the post-term duties stated in Section 8.6, which covers non-compete and no solicitation clauses, and abide by any other covenant in the agreement that requires performance after they are no longer a franchisee. The franchisee must also refrain from making disparaging comments about Ledgers or its employees, agents, members, directors, or franchisees. At Ledgers's option, the franchisee must offer Ledgers the right to purchase furniture, equipment, signage, fixtures, and supplies within thirty days of termination for the adjusted book value.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.