What constitutes an unauthorized assignment that could lead to All County terminating the franchise agreement?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
22.2.7. you (or any of your owners) make an unauthorized assignment of this Agreement or of an ownership interest in you or the Business;
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, an unauthorized assignment of the franchise agreement or an ownership interest in the business can lead to termination of the agreement.
Specifically, All County considers the following events as assignments, transfers, sales, gifts, or other dispositions that require their prior written approval: transfer of ownership of capital stock, partnership interest, or other equity interest in the franchisee; merger or consolidation or issuance of additional securities or interests representing an ownership interest in the franchisee; any issuance or sale of stock or securities convertible to stock to someone other than an existing owner; transfer of an interest in the franchise in a divorce, insolvency, or dissolution proceeding; transfer of an interest in the franchise in the event of death; pledge of the agreement or an ownership interest as security; and 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 All County.
For a prospective franchisee, this means that any change in ownership or control of the All County franchise must be approved by All County. Failure to obtain this approval can result in the termination of the franchise agreement. This includes not only direct sales of the business but also indirect transfers through the sale of stock or other equity interests, or even events like divorce or death. Franchisees need to be aware of these restrictions and ensure they comply with All County's requirements to avoid jeopardizing their franchise.
All County's right to terminate the agreement for unauthorized assignments is a fairly standard practice in franchising. Franchisors want to maintain control over who operates their franchises to protect their brand and ensure consistent quality. Franchisees should carefully review the transfer and assignment provisions in the franchise agreement and seek legal counsel if they have any questions or concerns.