Is the All Team Debtor allowed to assign or transfer their interest in the agreement?

According to All Team's 2025 Franchise Disclosure Document, the Debtor, typically the franchisee, is generally restricted from assigning or transferring their interest in the franchise agreement. Specifically, the agreement states that the Debtor "may not sell, assign or transfer any interest" in the agreement. This restriction covers all aspects of the Debtor's rights, title, interests, remedies, powers, and duties under the agreement. This clause protects All Team by ensuring that franchisees cannot simply hand over their obligations and rights to another party without the franchisor's consent.

However, the FDD also outlines some exceptions and conditions under which a transfer may be permitted. For instance, All Team will consent to an assignment if the franchisee transfers the business and rights to a corporation or limited liability company wholly owned by the franchisee (or all partners of a partnership franchisee). In this case, the corporation must assume all liabilities and obligations under the agreement, and the franchisee must pay a transfer fee of $2,000 to All Team to cover transfer costs. Additionally, the franchisee and their spouse (or all partners and their spouses, if a partnership) must execute a personal guaranty and assumption of obligations to ensure the corporation's compliance and personally supervise the agency's operation.

Another exception exists in the event of the franchisee's death or incapacity. The franchisee can appoint a designated heir to continue operating the agency, provided the heir meets certain qualifications. This transfer to heirs or personal representatives does not trigger All Team's right of first refusal, assuming the heirs meet the standards for new franchisees, execute the current franchise agreement, and ensure a manager completes All Team's initial training program. These provisions provide some flexibility for franchisees while still allowing All Team to maintain control over who operates its franchises.

Furthermore, if the franchisee receives a legitimate offer to acquire the franchise, they must submit the offer to All Team, which then has a right of first refusal. This means All Team can choose to acquire the franchise itself under the same terms. This clause gives All Team the ability to control who enters the franchise system and prevent unwanted or unqualified individuals from taking over an existing franchise. All Team can also modify the terms of the offer by substituting cash for other forms of payment, requiring customary warranties, and structuring the transaction as an asset purchase.