What happens immediately after the death or permanent disability of a Baya Bar franchisee?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
The grant of rights under this Agreement is personal to Franchisee, and on the death or permanent disability of Franchisee or any of Franchisee's Principals, the executor, administrator, conservator or other personal representative of Franchisee or Principal, as the case may be, shall be required to transfer Franchisee's or Principal'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 the Franchise granted by this Agreement will terminate.
A transfer under this Section 16.7, including without limitation, transfer by devise or inheritance, is subject to the conditions for Transfers in this Article 16 and unless transferred by gift, devise or inheritance, subject to the terms of Section 16.6 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 Franchisee's Franchised Business during the six (6)-month period from its onset.
Immediately after the death or permanent disability of such person, or while the Franchise is owned by an executor, administrator, guardian, personal representative or trustee of that person, the Franchised Business shall be supervised by an interim successor manager satisfactory to Franchisor, or Franchisor, in its sole discretion, may provide interim management at Franchisor's then-current interim management support fee, pending transfer of the Franchise to the deceased or disabled individual's lawful heirs or successors.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, if a franchisee or one of their principals dies or becomes permanently disabled, an interim successor manager, satisfactory to Baya Bar, must supervise the franchised business. Alternatively, Baya Bar can provide interim management at their current support fee, while the franchise is owned by the executor, administrator, guardian, personal representative, or trustee of the deceased or disabled individual. This arrangement is temporary, pending the transfer of the franchise to the lawful heirs or successors of the deceased or disabled individual.
The FDD defines "permanent disability" as a mental or physical condition that prevents the person from continuously and materially supervising the Baya Bar franchise for six months from the onset of the condition. The executor, administrator, or personal representative has six months from the date of death or permanent disability to transfer the franchisee's interest in the Franchise Agreement to a third party approved by Baya Bar.
Failure to transfer the franchise within the specified six-month period constitutes a material default, leading to the termination of the franchise agreement. Any transfer, including those by devise or inheritance, is subject to the standard transfer conditions outlined in the franchise agreement. If the transfer is not completed within 120 days or if there are material changes to the offer, Baya Bar retains the right of first refusal.