If Mr. Sandless exercises its Step-In Rights, what does Mr. Sandless do with the monies generated by the operation of my business?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
We shall keep in a separate account all monies generated by the operation of your Business, less the expenses of the Business, including reasonable compensation and expenses for our representatives. In the event of our exercise of the Step-In Rights**,** you agree to hold harmless us and our representatives for all actions occurring during the course of such temporary operation. You agree to pay all of our reasonable attorneys' fees and costs incurred as a consequence of our exercise of the Step-In Rights. Nothing contained herein shall prevent us from exercising any other right which we may have under this Agreement, including, without limitation, termination.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, if Mr. Sandless exercises its Step-In Rights, the company will keep all monies generated by the operation of your Mr. Sandless Business in a separate account. From these funds, Mr. Sandless will deduct the expenses of the business, including reasonable compensation and expenses for their representatives.
As a franchisee, you agree to hold Mr. Sandless and its representatives harmless for all actions occurring during the temporary operation of the business under the Step-In Rights. Additionally, you are responsible for paying all of Mr. Sandless's reasonable attorneys' fees and costs incurred as a result of their exercise of these Step-In Rights.
The FDD clarifies that the exercise of Step-In Rights does not prevent Mr. Sandless from exercising any other right they may have under the agreement, including termination of the franchise agreement. This means that even if Mr. Sandless steps in to operate the business temporarily, they still retain the option to terminate the agreement entirely.