Under what conditions can an individual Amorino franchisee transfer their interest to a business entity?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
- C.
Transfer by Individual Franchisee to Business Entity for Convenience.
If you are an individual, you may transfer your interest in this Agreement to a Business Entity formed solely for purposes of owning and operating the Franchised Business for convenience of operation of this Agreement, provided however that you may not transfer such interest until we have consented to such transfer.
In connection with our providing such consent, you must deliver certain documents and provide evidence to our satisfaction that the Business Entity meets certain requirements, as follows:
(1) You and such Business Entity must execute our then-current standard form of assignment and assumption agreement in which the Business Entity will agree to be bound by, and to assume and discharge your obligations under, this Agreement, and you agree to remain personally liable under this Agreement.
(2) The Business Entity must be newly formed and articles or certificate of incorporation, formation or organization, bylaws, operating agreement or other organizational documents (collectively, the "Organizational Documents") must state that its activities are limited exclusively to the ownership and operation of the Franchised Business.
(3) You must own and control 100% of the equity interest of the Business Entity, and no interest may be transferred without our prior written consent.
If we do consent to any transfer, each Principal of the Business Entity and their spouse or registered domestic partner must provide a personal guaranty in our then-current form of personal guaranty.
(4) The Organizational Documents of such Business Entity shall recite that the issuance and transfer of any securities or interest in the Business Entity are restricted by the terms of this Agreement.
(5) The Organizational Documents of such Business Entity may not be amended or revised without our prior written consent.
(6) The Business Entity must remain in existence and in good standing during the term of this Agreement, and you shall not take any actions to dissolve the Business Entity.
(7) You shall have paid the transfer fee in the amount set forth in the Data Sheet plus the reimbursement of our reasonable costs and expenses (including legal fees) incurred in facilitating the transfer.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, an individual franchisee can transfer their interest in the franchise agreement to a business entity if it is formed solely for owning and operating the franchised business for convenience. However, this transfer requires Amorino's consent.
To obtain consent, the franchisee must provide documentation and evidence that the business entity meets specific requirements. Both the franchisee and the business entity must execute Amorino's standard assignment and assumption agreement, where the business entity agrees to be bound by the obligations of the franchise agreement, and the franchisee remains personally liable. The business entity must be newly formed, and its organizational documents must limit its activities exclusively to the ownership and operation of the Amorino franchised business. The franchisee must own and control 100% of the equity interest in the business entity, and no interest can be transferred without Amorino's prior written consent.
Furthermore, the organizational documents must state that the issuance and transfer of any securities or interest in the business entity are restricted by the terms of the franchise agreement and cannot be amended without Amorino's consent. The business entity must remain in existence and in good standing during the term of the agreement, and the franchisee cannot take any actions to dissolve it. Finally, the franchisee must pay the transfer fee as specified in the Data Sheet, along with reimbursement for Amorino's reasonable costs and expenses, including legal fees, incurred in facilitating the transfer.