Under the Baya Bar Guaranty, what happens if the Franchisee's ownership or control changes?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 16.2 Restrictions on Transfers by Franchisee. Franchisee's rights and duties under this Agreement are personal to Franchisee as it is organized and with the Principals of the business as they exist on the date of execution of this Agreement, and Franchisor has made this Agreement with Franchisee in reliance on Franchisor's perceptions of the individual and collective character, skill, aptitude, attitude, business ability, and financial capacity of Franchisee. Thus, no transfer, as hereafter defined, may be made without Franchisor's prior written approval. Franchisor may void any transfer made without such approval.
- 16.3 Transfers by Franchisee.
Franchisee shall not directly or indirectly sell, assign, transfer, give, devise, convey or encumber this Agreement or any right or interest herein or hereunder (a "Transfer"), the Franchise, the Franchised Business or any assets thereof (except in the ordinary course of business) or suffer or permit any such assignment, transfer, or encumbrance to occur by operation of law unless it first obtains the written consent of Franchisor.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, Baya Bar requires written consent from the franchisor for any transfer of the franchise agreement or the franchised business. According to the FDD, these rights and duties are personal to the franchisee as it is organized and with the Principals of the business as they exist on the date of execution of this Agreement. Baya Bar has made the agreement with the franchisee based on their perceptions of the individual and collective character, skill, aptitude, attitude, business ability, and financial capacity of the franchisee. Therefore, any transfer, defined as selling, assigning, or conveying the agreement, franchise, or business assets, requires prior written approval from Baya Bar.
If a franchisee attempts to transfer the Baya Bar franchise without obtaining the franchisor's written consent, Baya Bar has the right to void the transfer. This provision allows Baya Bar to maintain control over who operates its franchises and ensures that new operators meet their standards.
This requirement is typical in franchising, as franchisors want to ensure that new franchisees are qualified and capable of maintaining the brand's standards and reputation. Prospective Baya Bar franchisees should carefully review the conditions under which transfers are permitted and the criteria Baya Bar uses to evaluate potential transferees.