Does the definition of 'transfer' by an All Team franchisee include a transfer of assets?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
- O. "Transfer" means and includes any voluntary or involuntary, direct or indirect, assignment, sale, gift, conveyance, lease or other disposition of an interest in this Agreement, FRANCHISEE or the Agency, including: (a) transfer of any capital stock, partnership interest, limited liability company interest or other ownership interest; (b) merger, consolidation, reorganization, business combination or other issuance of additional stock or ownership interests; (c) transfer in bankruptcy or dissolution of marriage or otherwise by operation of law or by order of court; (d) transfer to a personal representative upon disability or transfer upon the death of a Principal Owner; (e) the grant or creation of any lien or encumbrance on any ownership interest or asset; (f) the grant of any option, call, warrant, conversion rights or rights to acquire any equity or voting interest; (g) assignment of contract rights; (h) sale of assets (including the inventory, furniture, fixtures, equipment and other operating assets of the Agency, other than in ordinary course of business); or (i) any change of control or management of the Agency.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 28–30)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the definition of 'transfer' does include the sale of assets. Specifically, the FDD states that a transfer includes the sale of assets, including inventory, furniture, fixtures, equipment, and other operating assets of the agency, unless it occurs in the ordinary course of business. This definition is broad, covering both voluntary and involuntary transfers, direct and indirect assignments, sales, gifts, conveyances, leases, or other dispositions of an interest in the franchise.
This definition has significant implications for All Team franchisees. Any action that could be construed as a disposition of interest in the franchise, even something as seemingly straightforward as selling equipment, could trigger the transfer provisions of the franchise agreement. This means that franchisees need to be aware of these provisions and seek approval from All Team for any transaction that might fall under this definition.
Furthermore, the definition extends beyond typical sales or assignments to include events like mergers, reorganizations, transfers in bankruptcy, or changes in control or management. The grant or creation of any lien or encumbrance on any ownership interest or asset also constitutes a transfer. This comprehensive definition ensures that All Team retains control over who operates its franchises and under what conditions.
For a prospective franchisee, this underscores the importance of carefully reviewing the transfer provisions in the franchise agreement and understanding the circumstances under which All Team's approval is required. It also highlights the need to maintain open communication with All Team regarding any potential transactions that could be considered a transfer.