Must all royalties be paid to All County before a transfer is approved?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
If the transfer is of this Agreement or a controlling interest in you, or is one of a series of transfers which in the aggregate constitute the transfer of this Agreement 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:
20.4.1. Abilities. The transferee and its direct and indirect owners have the moral character, skill, aptitude, attitude, experience, references, credentials, acumen and financial capacity to operate the Business.
20.4.2. Current Accounts. You have paid all Royalties, Ad Fees, amounts owed for purchases from us and all other amounts owed to us or to third party creditors and have submitted all required reports and statements.
20.4.3. Training. The transferee's Managing Owner has agreed to complete training to our satisfaction and does complete training to our satisfaction prior to closing.
20.4.4. Franchise Agreement. The transferee has agreed to be bound by all of the terms and conditions of this Agreement for the remainder of its Term or, at our option, must execute our then current standard form of franchise agreement and related documents used in the state in which your Business is located (which may provide for different royalties, advertising contributions and expenditures, duration and other rights and obligations than those provided in this Agreement).
Source: Item 23 — Receipts (FDD pages 43–157)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, a franchisee must have paid all outstanding royalties, ad fees, and any other amounts owed to All County or third-party creditors before a transfer of ownership can be approved. Additionally, all required reports and statements must be submitted. This requirement ensures that All County franchisees are up-to-date on all financial obligations before transferring ownership to a new franchisee.
This condition protects All County by ensuring that the brand's revenue stream is not disrupted by transfers of ownership. It also ensures that the new franchisee is not burdened with the previous owner's debts. For a prospective franchisee, this means that if they are considering purchasing an existing All County franchise, they should verify that all outstanding royalties and fees have been paid before completing the purchase.
In addition to settling outstanding financial obligations, the potential new All County franchisee must also meet All County's standards for franchisees. The transferee's Managing Owner must also complete training to All County's satisfaction before closing the transfer. The transferee must also agree to be bound by the current franchise agreement's terms and conditions for the remainder of its term or execute All County's then-current standard franchise agreement.