In the event of the death or permanent disability of a Baya Bar Developer, how long does their representative have to transfer the interest in the Agreement?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
administrator, conservator, or other personal representative of Developer shall be required to transfer Developer's interest in this Agreement within six (6) months from the date of death or permanent disability to a third party approved by Franchisor. Failure to transfer in accordance with the forgoing will constitute a material default and all that is granted by this Agreement will terminate. A transfer under this Section 6.6, including without limitation, transfer by devise or inheritance, is subject to the conditions for Transfers in this Article 6 and unless transferred by gift, devise, or inheritance, subject to the terms of Section 6.5 above. For purposes of this Agreement, the term "permanent disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent such person from providing continuous and material supervision of the operation of Developer's Baya Bar outlet(s) and remaining development schedule during the six (6)-month period from its onset.
Immediately after the death or permanent disability of such person, or while the rights granted under this Agreement is owned by an executor, administrator, guardian, personal representative or trustee of that person, the Developer's Baya Bar outlet(s) and remaining development schedule shall be supervised by an interim successor manager satisfactory to Franchisor, or Franchisor, in its sole discretion, may provide interim management at a fee equal to twenty percent (20%) of the Gross Revenue generated by the Developer's Baya Bar outlet(s) during Franchisor's operation thereof, plus any and all costs of travel, lodging, meals and other expenses reasonably incurred by Franchisor, pending transfer of the Developer's Baya Bar outlet(s) and remaining development schedule to the deceased or disabled individual's lawful heirs or successors.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, in the event of the death or permanent disability of a Baya Bar Developer, their executor, administrator, conservator, or other personal representative has six months from the date of death or permanent disability to transfer the Developer's interest in the Franchise Agreement. This transfer must be to a third party approved by Baya Bar. Failure to transfer the interest within this six-month timeframe constitutes a material default, leading to the termination of the agreement.
During this period, an interim successor manager, satisfactory to Baya Bar, must supervise the Baya Bar outlet(s) and the remaining development schedule. Alternatively, Baya Bar, at its discretion, may provide interim management. If Baya Bar provides interim management, they will receive a fee equal to 20% of the Gross Revenue generated by the Baya Bar outlet(s), in addition to reimbursement for all costs of travel, lodging, meals, and other expenses reasonably incurred. This arrangement remains in effect until the transfer of the Baya Bar outlet(s) and the remaining development schedule to the deceased or disabled individual's lawful heirs or successors.
It is important to note that any transfer under this section, including transfers by devise or inheritance, is subject to the standard transfer conditions outlined in the agreement. Furthermore, unless the transfer is by gift, devise, or inheritance, it is subject to the terms of Section 6.5, which likely involves additional conditions or requirements. This ensures that Baya Bar maintains control over who becomes a franchisee, even in cases of death or disability, and that the brand's standards and reputation are upheld.