What conditions must be met for Baya Bar to approve a transfer of the Multi-Unit Development Agreement?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
ions 6.2, 6.3 | No transfer is allowed without our consent, which we will not unreasonably withhold. |
| Section in Multi | |||
|---|---|---|---|
| Unit Development | |||
| Provision | Agreement | Summary | |
| m. | Conditions for franchisor approval of a transfer | Section 6.3 and 6.4 | Conditions include: our decision not to exercise our right of first refusal; transferee meets our then-current standards for qualifying developers; you have paid us all amounts owed; transferee signs our then-current form of Multi-Unit Development Agreement, which may have materially different terms from your Multi Unit Development Agreement; you and the transferee sign a General Release in the form of Attachment 3 to the Franchise Agreement; you shall subordinate any claims you have against the transferee to us; our approval of the material terms and conditions of the transfer; payment of a transfer fee equal to 50% of the then current initial franchise fee or 25% of the then-current initial franchise fee for transfer to an existing developer or franchisee in good standing, or $2,000 for transfers among owners or $2,500 for a transfer to a spouse, parent or child upon |
| n. | Franchisor's right of first refusal to acquire franchisee's business | Section 6.5 | death or permanent disability. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 43–52)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, several conditions must be met for the franchisor to approve a transfer of the Multi-Unit Development Agreement. These conditions are detailed in Sections 6.3 and 6.4 of the agreement.
First, Baya Bar must decide not to exercise its right of first refusal, meaning they decline the opportunity to acquire the development rights themselves. The proposed transferee must also meet Baya Bar's then-current standards for qualifying developers, ensuring they have the necessary capabilities and resources. The franchisee looking to transfer must have paid all outstanding amounts owed to Baya Bar.
Additionally, the transferee is required to sign Baya Bar's then-current form of Multi-Unit Development Agreement, which may contain terms that differ significantly from the original agreement. Both the transferring franchisee and the transferee must sign a General Release in the form specified in Attachment 3 to the Franchise Agreement. The transferring franchisee must also subordinate any claims they have against the transferee to Baya Bar. The franchisor's approval of the material terms and conditions of the transfer is also required. Finally, a transfer fee must be paid, which is equal to 50% of the then-current initial franchise fee, or 25% of the then-current initial franchise fee for transfer to an existing developer or franchisee in good standing, or $2,000 for transfers among owners or $2,500 for a transfer to a spouse, parent or child.