Can a franchisee transfer their interest in the franchise, the Franchise Agreement, or the Franchised Business' assets without prior written consent from All States M.E.D.?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
| i. Franchisee's Obligations on Termination/Non Renewal | FA: Section 17.1 | If the Franchise Agreement is terminated or not renewed, you must: stop operating the Franchised Business; stop using any trade secrets, confidential information, the System and the Marks; cancel or assign to us any assumed names; pay all sums owed to us including damages and costs incurred in enforcing the Franchise Agreement; return the Operations Manual, trade secrets and all other confidential information; assign your telephone and facsimile numbers to us; comply with the covenants not to compete and any other surviving provisions of the Franchise Agreement. |
|---|---|---|
| j. | FA: Section 18.1 | There are no restrictions on our |
| Assignment of Contract | right to assign our interest in the | |
| by Franchisor | Franchise Agreement. | |
| k. "Transfer" by Franchisee – Definition | FA: Section 18.2 | "Transfer" includes transfer of an interest in the franchise, the Franchise Agreement or the Franchised Business' assets. |
| l. Franchisor's Approval of Transfer by Franchisee | FA: Section 18.2 | You may not transfer your interest in any of the items listed in (k) above without our prior written consent. If Franchisee is in compliance with this Agreement, Franchisor's consent to such transfer shall be conditioned upon the satisfaction of the requirements in FA Section 18.2 (a)-(m). |
| m. Conditions for Franchisor Approval of Transfer | FA: Section 18.2 | We will consent to a transfer if: we have not exercised our right of first refusal; all obligations owed to us are paid; you and the transferee have signed a general release (subject to applicable state law) in a form we proscribe; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 32–39)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, a franchisee is not allowed to transfer their interest in the franchise, the Franchise Agreement, or the Franchised Business' assets without obtaining prior written consent from All States M.E.D. first.
Specifically, the term "transfer" is defined broadly to include the transfer of an interest in the franchise itself, the Franchise Agreement, or the assets of the Franchised Business. This means any attempt to sell, assign, or otherwise convey any of these elements requires franchisor approval.
All States M.E.D. will grant consent to the transfer if they have not already exercised their right of first refusal. Additionally, all obligations owed to All States M.E.D. must be paid, and both the franchisee and the transferee must sign a general release in a form prescribed by All States M.E.D., subject to applicable state law. These conditions ensure that All States M.E.D. maintains control over who operates under their brand and that all financial obligations are met before a transfer occurs.