Under what conditions can All County withhold approval of a franchise transfer?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
| SECTION IN | ||
|---|---|---|
| FRANCHISE | ||
| PROVISION | AGREEMENT | SUMMARY |
| l. Franchisor approval of transfer by franchisee | 20.2 | Our approval of any transfer is required prior to your transferring the Franchise to a third party. However, will not unreasonably withhold our approval where the proposed transferee meets all our conditions for approval. |
| m. Conditions for franchisor approval of transfer | 20.4 | The proposed transferee must meet our standards as to character, financial resources, and willingness to assume the existing obligations under the Franchise Agreement, sign our then-current form of franchise agreement, and complete training. |
20.4. Conditions for Approval of Transfer. If you and all owners are in full compliance with this Agreement, we will approve a transfer that meets all of our applicable requirements and otherwise meets our applicable standards for ALL COUNTY® businessfranchisees.
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.
20.4.3. 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).
(g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause. This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise. Good cause shall include, but is not limited to:
- (i) The failure of the proposed transferee to meet the franchisor's then-current reasonable qualifications or standards.
- (ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor.
- (iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
- (iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
20.4.5. Transfer Fees. You must pay us a transfer fee in the amount of Ten Thousand Dollars ($10,000) at the time of the proposed transfer.
Additionally, as a required condition of our approval of any proposed transfer of the Franchised Business, or the proposed transfer of any part of the Territory, to any third party (which shall include any existing ALL COUNTY franchisee), the transferee must agree to pay us a separate fee (the "Transferee Administrative Fee") in the amount of Two Thousand Five Hundred Dollars ($2,500) for administrative and other expenses we incur in connection with the transfer.
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, All County's approval of a franchise transfer is required before a franchisee can transfer their franchise to a third party. However, All County states that they will not unreasonably withhold approval if the proposed transferee meets all of All County's conditions for approval.
All County lists several conditions that must be met for a transfer to be approved. The proposed transferee must meet All County's standards regarding character, financial resources, and willingness to assume the existing obligations under the Franchise Agreement. The transferee must also sign All County's then-current form of franchise agreement and complete training to All County's satisfaction before closing the transfer. The franchisee must be in full compliance with the existing Franchise Agreement, and the transferee must agree to be bound by all the terms and conditions of the agreement for the remainder of its term or execute All County's current standard form of franchise agreement.
Additionally, All County may refuse a transfer if the proposed transferee fails to meet All County's then-current reasonable qualifications or standards, if the proposed transferee is a competitor, if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations, or if the franchisee or proposed transferee fails to pay any sums owing to All County or cure any default in the franchise agreement at the time of the proposed transfer. The franchisee must pay a transfer fee of $10,000, and the transferee must agree to pay a Transferee Administrative Fee of $2,500.
These conditions are typical in franchising, as franchisors want to ensure that any new franchisee is well-qualified and capable of maintaining the brand's standards and reputation. Franchisees looking to sell their All County franchise should ensure they are in full compliance with their agreement and find a buyer who meets All County's criteria to facilitate a smooth transfer process.