Does Mr. Sandless have an option to purchase the personal property of the franchisee upon termination?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
-------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------| | | company with an address at 2970 Concord Rd, Aston, PA 19014 (the "Franchisor"), and | ACCOUNT AGREEMENT (the "Agreement") is made and entered into this day of (the "Effective Date"), by and between Mr. Sandless Franchise LLC, a Pennsylvania limited liability | | , a(n) | , with its principal place of business located at | | | and | 's principal(s) | , an individual residing | | at | and | , an individual residing at | | ("Principal(s)"). | | and Principal(s) shall be individually and collectively referred to | | as, and each is, the "Franchisee". | | | WHEREAS, Franchisee desires to enter into a franchise agreement with Franchisor for an Mr. Sandless business ("Franchise Agreement") which will allow Franchisee to conduct internet-based advertising, maintain social media accounts, software accounts, and use telephone listings linked to the Mr. Sandless brand.
WHEREAS, Franchisor would not enter into the Franchise Agreement without Franchisee's agreement to enter into, comply with, and be bound by all the terms and provisions of this Agreement;
NOW, THEREFORE, for and in consideration of the foregoing and the mutual promises and covenants contained herein, and in further consideration of the Franchise Agreement and the mutual promises and covenants contained therein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions
All terms used but not otherwise defined in this Agreement shall have the meanings set forth in the Franchise Agreement. "Termination" of the Franchise Agreement shall include, but shall not be limited to, the voluntary termination, involuntary termination, or natural expiration thereof.
2. Internet Advertising and Telephone Accounts
- 2.1 Interest in Websites, Social Media, and Software Accounts and Other Electronic Listings. Franchisee may acquire (whether in accordance with or in violation of the Franchise Agreement) during the term of Franchise Agreement, certain right, title, or interest in and to certain domain names, social media accounts, software accounts, hypertext markup language, uniform re
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
Based on the 2025 Mr. Sandless Franchise Disclosure Document, the document does not explicitly state that Mr. Sandless has an option to purchase the personal property of the franchisee upon termination. However, the FDD does state that upon termination of the Franchise Agreement, the franchisee must immediately transfer rights and interests in websites, social media, software accounts, electronic listings, telephone numbers, and telephone listings to Mr. Sandless. This transfer is required whether the termination is voluntary, involuntary, or due to natural expiration of the agreement.
This requirement has significant implications for a franchisee. It means that any online presence or advertising materials developed during the franchise term, including domain names, social media accounts, and telephone numbers, become the property of Mr. Sandless upon termination. The franchisee loses control over these assets, which could impact their ability to operate a similar business in the future, even if permitted by non-compete clauses.
Prospective franchisees should carefully consider the implications of these transfer requirements. It would be prudent to seek clarification from Mr. Sandless regarding the valuation and compensation, if any, for the transfer of these digital assets and telephone listings upon termination. Understanding the process and potential financial impact of this transfer is crucial for making an informed investment decision.