What are the post-termination obligations of a Ledgers franchisee?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 Ledgers Franchise Disclosure Document, Item 22 outlines the franchisee's obligations following the termination or expiration of the franchise agreement, including a sale of the franchise business. These obligations include ceasing operation of the franchised business and discontinuing the use of Ledgers' trademarks. The franchisee must also cancel any fictitious name filings that include Ledgers' marks and pay all outstanding amounts owed to Ledgers.
Additionally, the franchisee is required to reimburse 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. The franchisee must also use their best efforts to assist in transferring the lease of the facility, if requested by Ledgers. All paper and electronic copies of the manual and any confidential information must be returned or certified as destroyed, except for copies needed for legal or tax purposes.
The Ledgers franchisee must adhere to post-term non-compete and non-solicitation duties and any other duties that require performance after no longer being a franchisee. At Ledgers' option, the franchisee must offer Ledgers the right to purchase furniture, equipment, signage, fixtures, and supplies within thirty days of termination at the adjusted book value. The franchisee must also abide by any other covenant in the agreement that requires performance after termination and refrain from making disparaging comments about Ledgers or its current and former employees, agents, members, directors, or franchisees.
These post-termination obligations are fairly standard in franchising, aiming to protect the brand and ensure a smooth transition. Prospective franchisees should carefully review these obligations to understand their responsibilities upon exiting the Ledgers system, whether through choice, termination, or the natural expiration of the franchise agreement.