Does the definition of 'transfer' by an All Team franchisee include a transfer of the contract under the Fund?
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" is broad and encompasses various dispositions of interest in the Franchise Agreement. Specifically, the definition includes any voluntary or involuntary, direct or indirect assignment, sale, gift, conveyance, lease, or other disposition of an interest in the Franchise Agreement, the franchisee, or the agency. This broad definition extends to various scenarios, such as the transfer of capital stock, partnership interest, or limited liability company interest, as well as mergers, consolidations, reorganizations, or other issuances of additional stock or ownership interests. It also covers transfers in bankruptcy, dissolution of marriage, or by operation of law or court order, as well as transfers to a personal representative upon disability or death of a principal owner. The definition further includes the grant or creation of any lien or encumbrance on any ownership interest or asset, the grant of any option, call, warrant, conversion rights, or rights to acquire any equity or voting interest, and the assignment of contract rights.
The definition of "transfer" also includes the sale of assets, such as inventory, furniture, fixtures, equipment, and other operating assets of the agency, unless it occurs in the ordinary course of business. Additionally, any change of control or management of the agency is considered a transfer.
While the definition of 'transfer' is comprehensive, the document does not explicitly state whether it includes a transfer of the contract under the National Advertising Fund. A prospective franchisee should seek clarification from All Team regarding whether the transfer of the contract under the fund is included in the definition of transfer.