What does Section 15, 'Assignment', of the Batteries Plus Bulbs Franchise Agreement address?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
15. ASSIGNMENT
- A. By The Franchisor. This Agreement is fully assignable by Franchisor and benefits Franchisor's successors and assigns. Any such assignment will require the assignee to fulfill Franchisor's obligations under this Agreement. Franchisor reserves the right to outsource or assign any of its obligations under this Agreement to an affiliate or third party without Franchisee's consent.
- B. Franchisee Assignment To Corporation Or Limited Liability Company. Franchisee (as an individual) may assign this Agreement to a corporation or a limited liability company that conducts no business other than the Store (or other Batteries Plus® stores under franchise agreements with Franchisor), provided: (1) the Store is actively managed by Franchisee or an operating manager approved by Franchisor; (2) Franchisee owns at least seventy percent (70%) of the ownership interest in the corporation or limited liability company; (3) Franchisee and all Principal Owners of the assignee entity sign the Guaranty Agreement attached hereto as Exhibit E; (4) Franchisee provides Franchisor fifteen (15) days' written notice before the proposed date of assignment of this Agreement to the corporation or limited liability company; (5) Franchisee provides to Franchisor a certified copy of the articles of incorporation, operation agreement, organizational documents, a list of all shareholders or members having beneficial ownership, reflecting their respective interest in the assignee entity; and (6) the organizational documents and all issued and outstanding stock or membership certificates will bear a legend, in form acceptable to Franchisor, reflecting or referring to the assignment restrictions stated in Section 15(C) below. Franchisee will not pay a transfer fee for an assignment under Section 15(B).
- C. Franchisee Assignment Or Sale of Substantially All Of Its Assets. Franchisee understands that Franchisor has granted the Franchise under this Agreement in reliance upon Franchisee's individual or
Source: Item 22 — Contracts (FDD page 80)
What This Means (2025 FDD)
According to the 2025 Batteries Plus Bulbs Franchise Agreement, Section 15, titled 'Assignment,' outlines the conditions under which the franchise agreement can be transferred or assigned to another party.
Specifically, the agreement details three scenarios: assignment by the franchisor, assignment by the franchisee to a corporation or limited liability company, and assignment or sale of substantially all of the franchisee's assets. Batteries Plus Bulbs retains the right to assign the agreement to another party, who will then be responsible for fulfilling the franchisor's obligations. The franchisee, as an individual, can assign the agreement to a corporation or LLC under specific conditions, including maintaining at least 70% ownership, active management of the store, and providing the franchisor with necessary documentation and guarantees. No transfer fee is required for this type of assignment.
The agreement also covers the process and conditions for a franchisee to assign or sell the franchise to a third party. This includes obtaining franchisor consent, transferee training, lease consent, payment of an assignment fee (equal to 50% of the then-current standard initial franchise fee), signing a general release, and adherence to ownership restrictions. Batteries Plus Bulbs retains the right to make exceptions to these conditions and may provide further details in the Operations Manual or in writing. The franchisee is not allowed to subfranchise or sublicense any rights under the agreement.