Can a B Bops franchisee indirectly transfer the franchise without approval?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- ASSIGNMENT BY FRANCHISEE. Franchisee acknowledges that the rights and duties created pursuant to this Agreement are personal to Franchisee and its owners and that Company has granted the Franchise in reliance upon the character, skill, business ability, financial capacity and attitude of Franchisee and its owners. Therefore, without the prior written approval of Company, neither this Agreement nor the Franchise (or any interest therein), nor any controlling ownership interest in Franchisee, may be directly or indirectly, voluntarily or by operation of law, sold, assigned, conveyed, sublet, subfranchised or otherwise transferred to any person or entity. Any sale, assignment, conveyance, subfranchising or other transfer, including, without limitation, any transfer or issuance of capital stock or partnership or membership interests in Franchisee, any merger or consolidation, any transfer by decree in any divorce proceeding or by will or inheritance upon death of Franchisee or any owner thereof (hereinafter collectively referred to as "transfer") in violation of this Section 19 shall be void and confer no rights upon any third person. Company shall not unreasonably withhold its consent to any transfer when requested, provided that such transfer complies with the following requirements that may be applicable to the particular type of transfer:
- A. Transfer to Successor Entity. If Franchisee is an individual and desires to transfer the Franchise to a partnership, corporation or limited liability company, Company will not unreasonably withhold its consent to such transfer upon satisfaction of the following conditions: (i) such entity shall comply with each of the requirements specified in Section 20 hereof pertaining to ownership of the Franchise by a an entity; (ii) Franchisee shall be the owner of a majority of the equity and voting securities or interests issued by such entity; (iii) Franchisee shall be the principal executive of such entity; (iv) all accrued money obligations of Franchisee to Company shall be satisfied prior to the transfer and Franchisee shall otherwise be in full compliance with the terms of this Agreement; and (v) the entity agrees,
in writing satisfactory to Company, to assume all Franchisee's obligations hereunder. Any assignment to an entity as provided herein shall not release Franchisee from any obligations imposed by this Agreement and Franchisee shall remain liable for all such obligations.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, a franchisee cannot directly or indirectly transfer the franchise without prior written approval from B Bops. The document specifies that the rights and duties within the franchise agreement are personal to the franchisee and its owners. B Bops grants the franchise based on the character, skills, business ability, financial capacity, and attitude of the franchisee and their owners.
This restriction extends to any interest in the franchise or any controlling ownership interest in the franchisee. The FDD defines "transfer" broadly, including not only direct sales or assignments but also the transfer or issuance of capital stock, partnership interests, mergers, consolidations, transfers by divorce decree, or inheritance upon death. Any transfer that violates these conditions is considered void and does not grant any rights to a third party.
B Bops will not unreasonably withhold consent to a transfer if the franchisee meets certain requirements. If the franchisee is an individual and wants to transfer the franchise to a business entity like a partnership, corporation, or LLC, B Bops's consent will not be unreasonably withheld if the entity meets specific conditions. These conditions include complying with entity ownership requirements, the franchisee maintaining majority ownership and executive control, satisfying all financial obligations to B Bops, and the entity agreeing to assume all of the franchisee's obligations under the agreement. The franchisee remains liable for all obligations even after assignment to an entity.