factual

What post-term duties must a Ledgers franchisee adhere to after termination?

Ledgers Franchise · 2025 FDD

Answer from 2025 FDD Document

greement, if the following conditions remain within thirty (30) days after sending you notice and an opportunity to cure:

    1. You violate any other term or condition of this Agreement, the Franchisee Operations Manual, or any other agreement with us; or
    1. 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:

    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.

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

Source: Item 22 — CONTRACTS (FDD page 46)

What This Means (2025 FDD)

According to the 2025 Ledgers Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, a franchisee has several obligations. The franchisee must cease operating the franchised business and discontinue using any of Ledgers' marks. They must also cancel all fictitious name filings that include any of Ledgers' marks and pay all outstanding amounts owed to Ledgers.

Additionally, the franchisee is responsible for reimbursing clients for any fees paid for services not yet rendered. If requested by Ledgers, the franchisee must transfer all telephone numbers used in connection with the franchise business and provide written proof of the transfer. At Ledgers' option, the franchisee must also use their best efforts to 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 necessary copies for legal or tax purposes.

Furthermore, the franchisee must adhere to the post-term non-compete and non-solicitation duties outlined in Section 8.6 of the agreement, as well as any other duties that require performance after they are no longer a franchisee. At Ledgers' option, the franchisee must offer Ledgers the right to purchase their furniture, equipment, signage, fixtures, and supplies within 30 days of termination at the adjusted book value. The franchisee must also abide by any other covenant in the agreement that requires performance after they are no longer a franchisee and refrain from making disparaging comments about Ledgers or its current and former employees, agents, members, directors, or franchisees.

The non-compete clause specifies that for two years after termination, the franchisee cannot own or manage a business providing advisory, compliance, recordkeeping, payroll, or tax services within the territory or within 25 miles of its boundaries. During this period, they are also prohibited from directly or indirectly providing these services to any client, except through the Ledgers franchise business. These post-term obligations are significant and could substantially impact a franchisee's ability to operate a similar business after leaving the Ledgers system.

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.