What constitutes a breach of the All County franchise agreement regarding transfer?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
20.2. Assignment by You. This Agreement and the Franchise are granted personally to you. You may only assign or transfer any interest or ownership that you may have in the Business with our prior written approval. Any transfer without such approval constitutes a breach of this Agreement and is void. Our approval is conditioned on the prospective transferee agreeing to sign our then-current franchise agreement with us and meeting our qualifying conditions and requirements. We will not unreasonably withhold the approval of a prospective franchisee.
20.3. Assignments. An assignment, transfer, sale, gift or other disposition includes the following events:
- 20.3.1. transfer of ownership of capital stock, partnership interest, or other equity interest in you;
20.3.2. merger or consolidation or issuance of additional securities or interests representing an ownership interest in you;
20.3.3. any issuance or sale of your stock or any security convertible to your stock to any person or entity other than an existing owner;
20.3.4. transfer of an interest in you, this Agreement or the Business in a divorce, insolvency or corporate or partnership dissolution proceeding or otherwise by operation of law;
20.3.5. transfer of an interest in you, this Agreement or the Business, in the event of your death or the death of one of your owners, by will, declaration of or transfer in trust or under the laws of intestate succession;
20.3.6. pledge of this Agreement (to someone other than us) or of an ownership interest in you as security, foreclosure upon the Business or your transfer, surrender or loss of possession, control or management of the Business; or
20.3.7. transferring any of the accounts or clients of the Business to anyone except to another ALL COUNTY® business that has been approved in writing by us or to us or our designees.
Source: Item 23 — Receipts (FDD pages 43–157)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, transferring any interest or ownership in the business without prior written approval from All County constitutes a breach of the franchise agreement. This includes not only a direct sale of the franchise but also other actions that alter ownership or control. All County states that any transfer without their approval is considered void.
Specifically, the FDD lists several scenarios that are considered a transfer requiring approval. These include transferring ownership of stock or equity, mergers or issuance of additional securities, selling stock to someone other than an existing owner, transferring interest in the franchise during divorce or insolvency proceedings, transferring interest upon death, pledging the agreement as security, or transferring accounts or clients to anyone except another approved All County business or to All County itself.
This provision is typical in franchising, as franchisors want to maintain control over who operates their branded businesses. For a prospective All County franchisee, this means understanding that any change in ownership structure, even seemingly minor ones, must be vetted and approved by All County. Failure to do so could result in the termination of the franchise agreement.