What options does Amorino have after receiving a franchisee's notice of proposed assignment?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
| Assign j. ment of contract by franchisor | Section 7.1 of the area development agreement | or operate additional Stores which are not, at the time of such termination or expiration, the subject of a then existing franchise agreement between you and us, and we may ourselves, equip, open, own or operate, or license others to construct, equip, open, own or operate Stores in your territory, except as provided in any franchise agreement executed pursuant to the area development agreement. We shall have the right to assign the area development agreement, or any of its rights and privileges to any other person, firm or corporation without your prior consents. |
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| "Transfe k. r" by franchisee - defined | Section 7.3 of the area development agreement | Neither your interest in the area development agreement, nor any of your rights or privileges shall be assigned or transferred, voluntarily or involuntarily, in whole or in part, by operation of law or otherwise, in any manner, without our prior written consent, which may be withheld for any reason or for no reason |
| Franchis l. or approval of transfer by franchisee | Section 7.4 of the area development agreement | Except as expressly provided in Section 7.3 of the area development agreement, any assignment of the area development agreement, or any interest therein, shall be subject to our right of first refusal with respect thereto. Our right of first refusal shall be exercised in the following manner described in Section 7.4 of the area development agreement |
| Conditio m. ns for franchisor approval of transfer | Section 7.3 of the area development agreement | Should we not elect to exercise our right of first refusal, or should such right of first refusal be inapplicable, you do not have the right to submit a request for consent, and we are not obligated to even entertain or consider such a request, unless you demonstrate that:(i) that the assignee demonstrate that they have the skills, qualifications and economic resources necessary, in our judgment, reasonably exercised, to own and operate the stores contemplated by the area development agreement, and by all other agreements between the us and such assignee, and all agreements proposed to be assigned to such assignee;(ii) that the assignee expressly assumes in writing for our benefit all of your rights and obligations under the area development agreement and all franchise agreements executed pursuant hereto;(iii) that the assignee shall have completed our training program to our satisfaction, exercised in good faith; (iv) that as of the date of any such assignment, the assignor shall have fully complied with all of its obligations to us, whether under the area development agreement or any other agreement, arrangement or understanding with us;(v) that assignee, if then a franchisee of us, is not then in default of any of his obligations to us; (vi) that you provide a general release to us, our owners, |
| Franchis n. or's right of first refusal to acquire franchisee's business | Section 7.4 of the area development agreement | officers, directors, and affiliates; (vii) that the assignee shall pay to us a transfer fee which is reasonably required to cover our expenses relating to said assignment, and a training fee; provided however that we shall waive such training fee if the assignment is to an existing franchisee. (a) You must deliver to us a written notice clearly and unambiguously setting forth all of the terms and conditions of the proposed assignment and all available information concerning the proposed assignee. (b) Within thirty (30) days after our receipt of such notice (or if we shall request additional information, within thirty (30) days after receipt of such additional information), we may either consent or withhold consent to such assignment. (c) If we shall elect not to exercise our right of first refusal and shall consent to such assignment, you shall be free to assign the area development agreement to such proposed assignee on the terms and conditions specified in said notice.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 55–67)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, when a franchisee proposes to assign their area development agreement, Amorino has specific rights. The franchisee must provide Amorino with a written notice detailing all terms and conditions of the proposed assignment, along with information about the proposed assignee.
Within 30 days of receiving this notice (or additional requested information), Amorino has two options: they can either consent to the assignment or withhold their consent. If Amorino chooses not to exercise its right of first refusal and consents to the assignment, the franchisee is then permitted to assign the area development agreement to the proposed assignee under the terms specified in the notice.
This process ensures that Amorino maintains control over who becomes a franchisee and under what terms the transfer occurs. It allows Amorino to evaluate the proposed assignee's qualifications and ensure they meet the brand's standards before approving the transfer. This is a fairly standard practice in franchising, allowing franchisors to protect their brand and ensure consistency across their franchise network.