What is the deadline for a Red Wagon Club franchisee to pay all outstanding fees before a transfer?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
- (12) Franchisee has corrected any existing deficiencies of Franchisee's RWC Business of which Franchisor has notified Franchisee, and/or the transferee agrees to upgrade and refurbish any aspect of the Office in accordance with Franchisor's then-current requirements and specifications for new Businesses within the time period Franchisor specifies following the effective date of the transfer (Franchisor will advise the transferee before the effective date of the transfer of the specific actions that it must take and the time period within which such actions must be taken) and the transferee agrees to escrow an amount Franchisor approves for payment of the required upgrade or refurbishment;
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2024 FDD)
The 2024 Red Wagon Club Franchise Disclosure Document outlines several conditions that must be met before a franchise can be transferred. One of these conditions is that the franchisee must correct any existing deficiencies of the Red Wagon Club business that the franchisor has notified them about.
Additionally, if deficiencies are not corrected by the franchisee, the transferee must agree to upgrade and refurbish any aspect of the office according to Red Wagon Club's current requirements for new businesses. This upgrade or refurbishment must be completed within a timeframe specified by Red Wagon Club following the transfer's effective date.
To ensure the upgrade or refurbishment is completed, the transferee must agree to escrow an amount approved by Red Wagon Club for payment of the required upgrade or refurbishment. While the FDD specifies that existing deficiencies must be corrected, it does not provide a specific deadline for when all outstanding fees must be paid before a transfer. A prospective franchisee should seek clarification from the franchisor regarding the specific timing and requirements for settling outstanding fees during the transfer process.