What standards must a proposed transferee meet to be approved as a 1 800 Packouts franchisee?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
If you and your Owners are in full compliance with this Agreement, then subject to the other provisions of this Section 14 (Transfer), we will approve a transfer that meets all the applicable requirements of this Section. The proposed transferee and its Owners must be individuals of good character and otherwise meet our then applicable standards for Franchised Business franchisees. A sale or transfer of ownership, possession or control of the Franchised Business may be made only in conjunction with a transfer of this Agreement. If the transfer is of this Agreement, of the Franchised Business or a controlling interest in you ("controlling interest in you" means 33⅓% or more of your voting shares, ownership interests or other voting rights if you are an Entity owned by three or more persons; otherwise, 50% or more of your voting shares or other voting rights or ownership interests), or is one of a series of transfers which in the aggregate constitute the transfer of this Agreement, the Franchised Business or a controlling interest in you, all of the following conditions must be met prior to or concurrently with the effective date of the transfer:
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 1 800 Packouts Franchise Disclosure Document, a proposed transferee must meet certain standards to be approved as a franchisee. The transferee and their owners must be individuals of good character and meet 1 800 Packouts' then-current standards for franchisees.
For a transfer of the Franchise Agreement, the Franchised Business, or a controlling interest (33 1/3% or more of voting shares if the entity is owned by three or more persons, otherwise 50% or more), specific conditions must be met before or during the transfer. These conditions are not detailed in the provided excerpt, but the FDD indicates they exist and are applicable.
In practical terms, this means that if a franchisee wants to sell their 1 800 Packouts business, the person or entity buying it must be vetted and approved by 1 800 Packouts. This is a common practice in franchising to ensure that new franchisees are capable of maintaining the brand's standards and reputation. A prospective franchisee should inquire about the specific criteria 1 800 Packouts uses to evaluate potential transferees, as these are not fully outlined in the provided excerpt.