What is the definition of 'transfer' in the context of an All County franchise agreement?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
| SECTION IN | ||
|---|---|---|
| FRANCHISE | ||
| PROVISION | AGREEMENT | SUMMARY |
| k. “Transfer” by franchisee - | 20.3 | Includes any transfer of ownership. |
| definition |
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 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 31–34)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, a 'transfer' by the franchisee includes any transfer of ownership. The document further clarifies that an assignment, transfer, sale, gift, or other disposition encompasses several specific events.
Specifically, this includes the transfer of ownership of capital stock, partnership interest, or other equity interest in the franchisee. It also covers mergers, consolidations, or the issuance of additional securities or interests representing an ownership interest. Any issuance or sale of stock or securities convertible to stock to someone other than an existing owner also constitutes a transfer.
Furthermore, a transfer includes any interest in the franchisee, the Franchise Agreement, or the business due to divorce, insolvency, corporate or partnership dissolution, or by operation of law. It also includes such transfers in the event of death of the franchisee or one of the owners, whether by will, declaration of trust, or intestate succession. Pledging the Franchise Agreement or an ownership interest as security, foreclosure upon the business, or the franchisee's surrender or loss of possession, control, or management of the business are also considered transfers. Finally, transferring any of the accounts or clients of the business to anyone except another All County business approved in writing by All County, or to All County itself or its designees, is also defined as a transfer.
These stipulations are important for prospective franchisees to understand, as any of these actions would require All County's prior written approval, and failure to obtain such approval would constitute a breach of the Franchise Agreement.