What financial obligations must a Baya Bar franchisee fulfill before a transfer can be approved?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.1.4 promptly pay all sums owing to Franchisor and its affiliates.
Such sums shall include all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of any default by Franchisee.
The payment obligation herein shall give rise to and remain, until paid in full, a lien in favor of Franchisor against any and all of the personal property, furnishings, equipment, fixtures, and inventory owned by Franchisee and located at the Franchised Business location at the time of default;
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
The 2024 Baya Bar Franchise Disclosure Document outlines the franchisee's obligations upon termination or expiration of the agreement, which would also apply to a transfer scenario. Specifically, a franchisee must promptly pay all sums owing to Baya Bar and its affiliates. This includes any damages, costs, and expenses, including reasonable attorneys' fees, incurred by Baya Bar as a result of any default by the franchisee.
This payment obligation creates a lien in favor of Baya Bar against the franchisee's personal property, furnishings, equipment, fixtures, and inventory located at the franchised business at the time of default. This lien remains in effect until all outstanding amounts are paid in full. Therefore, before a transfer can be approved, a Baya Bar franchisee must ensure that all financial obligations to the franchisor and its affiliates are completely satisfied.
This requirement is fairly standard in franchising, as franchisors want to ensure they are not left with outstanding debts or liabilities when a franchise unit changes ownership. Prospective Baya Bar franchisees should carefully review their financial records and agreements with the franchisor to identify any potential outstanding obligations before attempting to transfer their franchise.