What happens to an Auntie Annes franchise in the event of the franchisee's death or disability?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| o. You must comply with our right of first refusal. p. If you operate a Co-Branded Shop, the Co-Branded Agreement or Co- Branded Franchise are transferred at the same time. | ||
| FA: 16.4 (non-control transfers) | a. You give us prior written notice of the transfer. b. You pay all sums owed. c. You are not in default d. Transferee meets qualifications e. Transferee signs assignment and guaranty f. You and your guarantors and owners sign a general release. g. You remain liable for pre-Transfer obligations. h. You pay us a Transfer Fee. | |
| FA: 16.5 (related party transfers) | a. You give us prior written notice of the transfer. b. You are not in default c. Transferee meets qualifications d. Transferee assumes in writing the Franchise Agreement and the guaranty. e. You may not be in default under the Franchise Agreement. f. You pay us a Transfer Fee. g. You and your guarantors and owners must sign a general release and remain liable for pre-Transfer obligations | |
| n. Our right of first refusal to acquire your business | FA: 16.8 | We can match any offer for your Shop or substantially all interests in your entity. |
| o. Our option to purchase your business | FA: 18.4 | We may purchase your Goods related to the Shop at the fair market value (exclusive of good will) and may purchase your Accepted Location if you own it or your interest in any lease. |
| p. Your death or disability | FA: 16.6 | Upon 180 days from your death or permanent incapacity you must transfer all rights and interests to buyer that complies with Transfer provisions, except no Transfer Fee will be due. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTIONS (FDD pages 86–91)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, in the event of the franchisee's death or permanent incapacity, the franchisee (or their estate) has 180 days to transfer all rights and interests in the franchise to a buyer.
This buyer must comply with all the standard transfer provisions outlined in the Franchise Agreement. This includes meeting Auntie Annes's qualifications for franchisees and signing the necessary documents to assume the obligations of the Franchise Agreement.
However, in the case of a transfer due to death or disability, Auntie Annes waives the transfer fee that would normally be required. This provides some financial relief to the franchisee's estate or the disabled franchisee during a difficult time. It is important to note that this transfer must occur within 180 days of the death or permanent incapacity to avoid potential issues with the franchise agreement.