Can the company assign the Auntie Annes agreement to another party without the franchisee's consent?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
Company may assign this Agreement to any person or entity without Franchisee consent.
This Agreement will be binding on and inure to the benefit of the parties and their respective successors and permitted assigns.
In the event Franchisee sells or transfers the Franchised Business, this Agreement shall terminate and the transferee shall be required to execute Company's then-current form of Service Level Agreement.
In the event of an assignment of the Franchise Agreement which has been approved by Franchisor, this Agreement shall be deemed to be assigned to the assignee of the Franchise Agreement and such assignee shall be deemed to have assumed all rights and obligations of Franchisee under this Agreement.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, Auntie Annes, referred to as the Company, has the right to assign the agreement to another party without obtaining consent from the franchisee. This means that Auntie Annes can transfer its rights and obligations under the agreement to another person or entity without needing the franchisee's approval.
This clause is important for prospective franchisees to understand. If Auntie Annes assigns the agreement, the franchisee will be dealing with a new party. While the terms of the agreement should remain the same, the new party's management style, resources, and priorities could differ from Auntie Annes. The franchisee should carefully consider this possibility and evaluate whether they are comfortable with the potential for a change in the other party involved in the agreement.
However, if the franchisee sells or transfers the franchised business, the agreement will terminate, and the new owner will be required to execute Auntie Annes's current Service Level Agreement. If an assignment of the Franchise Agreement is approved by Auntie Annes, the agreement will be assigned to the assignee, who will assume all rights and obligations of the franchisee under the agreement. This ensures that the terms and conditions of the franchise agreement are upheld even if the business changes hands.