What happens if an Auntie Annes franchisee wants to make a non-control transfer of their franchise?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
| | 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. | | 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. |
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, a franchisee who wishes to make a non-control transfer must meet several requirements. First, the franchisee must provide Auntie Annes with prior written notice of the transfer. They must also ensure that all outstanding payments owed to Auntie Annes are settled before the transfer can proceed. The franchisee cannot be in default of the Franchise Agreement.
The individual or entity to whom the franchise is being transferred (the transferee) must meet Auntie Annes's qualifications for new franchisees. Both the transferee and the franchisee must sign specific legal documents. The transferee is required to sign an assignment and guaranty, while the franchisee, along with their guarantors and owners, must sign a general release.
Even after the transfer, the original franchisee remains liable for any obligations that arose before the transfer took place. Finally, the franchisee is responsible for paying Auntie Annes a transfer fee to complete the process. Auntie Annes also retains the right of first refusal to acquire the franchisee's business by matching any offer for the shop or substantially all interests in the franchisee's entity.