Does Bath Tune Up have the right to approve all transfers of a franchise?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN AGREEMENT | SUMMARY |
|---|---|---|
| j. Assignment of contracts by franchisor | 9.1 | We may assign the franchise agreement if we determine the transferee is financially capable of performing our obligations and if the transferee agrees to assume such obligations. |
| k. “Transfer” by | 1.20, 9.2 | Includes transfer of contract or assets or any ownership |
| franchisee – definition | change. | |
| l. Franchisor approval of | 9.2(b) | We have the right to approve all transfers. |
| transfer | ||
| m. Conditions for franchisor approval of transfer | 9.2(b)(i)-(vii) | New franchisee qualifies, initial franchise fee paid, transfer fee paid, purchase agreement approved, training arranged, release signed by you, all money due and owing to us paid by you, and current agreement signed by new franchisee. (Also see r. below.) |
| n. Franchisor’s right of | 9.3 | We can match any offer for your Franchised Business. |
| first refusal to acquire |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 38–41)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, Bath Tune Up retains the right to approve all franchise transfers. This means that if a franchisee wishes to sell their franchise to someone else, Bath Tune Up has the authority to review and either approve or deny the transfer. This provision is common in franchising, as it allows the franchisor to maintain control over who joins their system and ensures that new franchisees meet their standards.
Several conditions must be met for Bath Tune Up to approve a transfer. The potential new franchisee must qualify as a franchisee, and the initial franchise fee must be paid. Additionally, a transfer fee must be paid to Bath Tune Up, and the purchase agreement must be approved by them. Training must be arranged for the new franchisee, and the current franchisee must sign a release. All outstanding payments owed to Bath Tune Up must be settled by the current franchisee, and the new franchisee must sign the current franchise agreement.
Bath Tune Up also has the right of first refusal to acquire the franchisee's business, meaning they can match any offer made by a potential buyer. This gives Bath Tune Up the option to purchase the franchise themselves if they choose. These transfer conditions are designed to protect the integrity of the Bath Tune Up brand and ensure that any new franchisees are well-qualified and committed to the system. Franchisees looking to transfer their business should be aware of these requirements and plan accordingly.