What actions are considered a 'Transfer' of a Precision Door Service franchise under the agreement?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
mediately prior to the transfer plus 0.25%, and such rate will gradually increase by 0.25% on each anniversary of the transfer date until the license fee rate reaches the rate set forth in the Then-Current FA.
For illustration purposes only*:* if the license fee rate applicable immediately prior to a Transfer is 1.75%, and our Then-Current FA provides for a license fee rate of 3%, then immediately following the transfer, the transferee's license fee rate would initially be 2%, and upon each anniversary of the transfer date, the rate would increase by 0.25%, until reaching the rate of 3%.
- B. Transfer Fee Cap: If transferee engages in an assignment or transfer (as defined in the Then-Current FA), in accordance with the terms of the Then-Current FA, to an assignee or transferee approved by Franchisor (the "Buyer"), whether it is an assignment of the Then-Current FA only or a simultaneous transfer of multiple Precision Garage Door Service franchised businesses owned by transferee (the "Assignment"), transferee's total transfer fee for the Assignment will not exceed $500,000 (the "Transfer Fee Cap"), so long as the following conditions are met:
- (i) Franchisor or any of its agents or representatives (including outside franchise brokers) is not involved in finding or soliciting the Buyer; and
- (ii) if the Assignment involves an assignment of multiple Precision Door Service franchised businesses owned by transferee, all of the franchised businesses must be assigned to Buyer and the assignments must be accomplished as a simultaneous transfer as part of a single transaction between transferee and Buyer.
- (iii) For further avoidance of doubt, the Transfer Fee Cap only applies to Assignments under the Then-Current FA and does not apply to any further renewals, transfers or assignments of the Then-Current FA."
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- Notwithstanding anything to the contrary in the Franchise Agreement, in the event of a conflict between the provisions of the Franchise Agreement and the provisions of this Rider, the provisions of this Rider shall control.
Source: Item 22 — Contracts (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Precision Door Service Franchise Disclosure Document, a transfer of the franchise involves an assignment or transfer to an approved buyer.
The document specifies that if a franchisee engages in an assignment or transfer to a buyer approved by Precision Door Service, it is considered a transfer. This can include the assignment of the current Franchise Agreement or a simultaneous transfer of multiple Precision Garage Door Service franchised businesses owned by the franchisee to the buyer.
It is important to note that Precision Door Service requires the assignee to meet all the then-current requirements for the Precision Garage Door Service franchise program, sign the current form of the franchise agreement, and have its owners become guarantors of the business. Additionally, all outstanding amounts owed to Precision Door Service or its affiliates must be paid, and all required reports must be submitted before the transfer can be completed.