What is the Zoomin Groomin franchisee's obligation regarding reimbursement for expenditures in the event of death or incapacity?

According to Zoomin Groomin's 2025 Franchise Disclosure Document, in the event of a franchisee's death or incapacity, the franchisee or their estate is responsible for reimbursing Zoomin Groomin for reasonable expenses incurred while they operate or assist in the operation of the Franchised Business. This reimbursement includes the expenses incurred plus 10% of gross revenues for the period Zoomin Groomin is involved.

This means that if a Zoomin Groomin franchisee dies or becomes incapacitated, Zoomin Groomin will step in to manage or assist in managing the business. The franchisee's estate (or the franchisee themselves, if incapacitated) will then be required to pay Zoomin Groomin for any reasonable expenses they incur during this period. This includes not only the direct costs but also an additional 10% of the gross revenues generated during the time Zoomin Groomin is assisting.

For a prospective franchisee, this highlights the importance of having a solid succession plan and adequate insurance coverage. In the unfortunate event of death or incapacity, these measures can help ensure that the business continues smoothly and that the financial burden on the franchisee's family or estate is manageable. The 10% of gross revenues charge could significantly impact the profitability during this transition period, so it's crucial to understand the potential financial implications.

It is important for prospective franchisees to discuss with Zoomin Groomin what constitutes "reasonable expenses" in this context and how these expenses will be documented and communicated. Understanding this process can help avoid potential disputes during a difficult time. Franchisees should also consider how this obligation might interact with any existing business insurance policies or estate planning documents.