Does Bang Cookies require prior written consent for a franchisee to transfer their franchise?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
| i. | Franchisee's obligations on termination/non-renewal | 6, 17 | You must: pay all sums that you owe to us under the Franchise Agreement and all other agreements with us; cease owning and operating the Franchised Business; cease representing yourself as a franchisee of ours; permanently cease using and/or accessing the System, the Licensed Marks, our confidential information, the operations manual, the Business Management System, the Business Management System Data, and the System Supplies; return the operations manual and all confidential information to us in the original form provided to you and document the destruction of all electronic files related to same; completely de-identify the location and/or facility associated with the Franchised Business; as requested by us, transfer to us all data, telephone listings, digital media, accounts, web listings and websites associated with the Franchised Business; and abide by the post-termination non-competition covenants and restrictions. | |----|--------------------------------------------------------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | j. | Assignment of the contract by franchisor | 14.A. | No restriction on our right to assign. | | k. | "Transfer" by franchisee definition | 14.B. | A transfer means and includes, whether voluntary or involuntary, conditional or unconditional, direct or indirect: (a) an assignment, sale, gift, transfer, pledge or sub-franchise; (b) the grant of a mortgage, charge, lien or security interest, including, without limitation, the grant of a collateral assignment; (c) a merger, consolidation, exchange of shares or other ownership interests, issuance of additional ownership interests or securities representing or potentially representing ownership interests, or redemption of ownership interests; and (d) a sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any holder of ownership interests or to control the operations or affairs of Franchisee. | | l. | Franchisor's approval of transfer by franchisee | 14.B. | Transfers require our prior written consent, which may be granted or withheld in our discretion. | | m. | Conditions for franchisor's approval of transfer | 14.C. | For approval of your transfer, you must provide us with 30 days prior written notice of the proposed transfer; you and your Owners must not have defaulted in your obligations under the Franchise Agreement and all other agreements with us; you and your Owners must be in compliance with your obligations under |
| n. | Franchisor's right of first refusal to acquire franchisee's business | 14.F. | We have the right to match any offer to purchase your Shop or the Corporate Entity operating your Shop.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–49)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, a franchisee needs to obtain prior written consent from Bang Cookies before transferring their franchise. This consent can be granted or withheld at Bang Cookies's discretion.
This requirement means that if a franchisee wants to sell their Bang Cookies business, gift it, or transfer it in any way, they must first get approval from Bang Cookies. This approval process gives Bang Cookies control over who becomes a new franchisee and ensures that the new owner meets their standards. The definition of "transfer" is broad, covering assignments, sales, gifts, transfers, pledges, sub-franchises, mortgages, charges, liens, security interests, mergers, consolidations, exchanges of shares, issuance of additional ownership interests, redemption of ownership interests, sales or exchanges of voting interests, or agreements granting control of voting rights.
To get approval for a transfer, the Bang Cookies franchisee must provide written notice 30 days in advance. Additionally, the franchisee and their owners must be in compliance with all obligations under the Franchise Agreement and any other agreements with Bang Cookies. This ensures that the franchisee is in good standing before attempting to transfer the franchise.
This requirement is fairly standard in franchising, as it allows the franchisor to maintain brand consistency and protect their investment by carefully vetting potential new franchisees. A prospective Bang Cookies franchisee should understand that they cannot simply sell or transfer their franchise to anyone without the franchisor's explicit approval.