Does Bang Cookies have any restrictions on assigning the franchise contract?
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, Bang Cookies places certain restrictions on a franchisee's ability to transfer their franchise. Specifically, a franchisee needs to obtain prior written consent from Bang Cookies before any transfer can occur, and Bang Cookies has the right to withhold this consent at their discretion.
The FDD defines 'transfer' broadly, encompassing not only direct assignments, sales, or sub-franchises, but also indirect transfers such as mergers, consolidations, exchanges of shares, or the granting of security interests. This comprehensive definition means that franchisees must seek approval from Bang Cookies for a wide range of transactions that could affect the ownership or control of the franchise.
To gain approval for a transfer, a Bang Cookies franchisee must provide the franchisor with 30 days' prior written notice. Additionally, both the franchisee and their owners must be in full compliance with all obligations under the Franchise Agreement and any other agreements with Bang Cookies. This indicates that any existing defaults or breaches of contract could prevent the transfer from being approved. Bang Cookies also has the right to match any offer to purchase your Shop or the Corporate Entity operating your Shop.
These transfer restrictions are typical in franchising, as they allow Bang Cookies to maintain control over who becomes a franchisee and to ensure that new franchisees meet their standards. Prospective franchisees should carefully consider these restrictions and discuss with Bang Cookies what factors they consider when evaluating a transfer request.