What happens to the Beauty Bungalows franchise if the franchisee dies or becomes disabled?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
| H | “Cause” defined - non- curable defaults | Section 13.02(b) | Non-curable defaults include misrepresentation by you, failure to complete initial training, bankruptcy, insolvency, or appointment of receiver, abandonment, trademark misuses, unauthorized disclosure, unapproved transfers, or repeated noncompliance. (Termination upon bankruptcy may not be enforceable under U.S. Bankruptcy Law.) |
|---|---|---|---|
| I | Franchisee’s obligations on termination/nonrenewal | Sections 3.07, 13.03, 13.04 | Obligations include complete de- identification, non-competition, return of confidential or critical business information, payment of amounts due, and, upon Franchisor’s election, cooperation regarding assignment of lease. |
| J | Assignment of contract by franchisor | Section 14 | No restriction on our right to assign. |
| K | “Transfer” by franchisee - defined | Sections 1.23, 14.03 | Includes transfer of contract or assets or ownership change. |
| L | Franchisor approval of transfer by franchisee | Sections 14.04-14.08 | We have the right to approve all transfers but will not unreasonably withhold approval. |
| M | Conditions for franchisor approval of transfer | Section 14.04 | Franchise must be open for business to the general public at the Premises, New Franchisee qualifies, Transfer Fee paid, purchase agreement approved, training arranged, general release signed by you, and current agreement signed by new Franchisee. Any brokers’ fees or commissions that arise because of the transfer must be paid by the Franchisee. |
| N | Franchisor’s right of first refusal to acquire franchisee’s Business. | Section 14.09 | We can match any offer for your Business. |
| O | Franchisor’s option to purchase franchisee’s Business | Section 14.09 | We may purchase the Business pursuant to our Right of First Refusal to match any offer for your Business. |
| P | Death or disability of franchisee | Section 14.08 | Franchise must be assigned by estate to approved transferee within 120 days. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 36–40)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, in the event of the death or disability of a franchisee, the franchise must be assigned by the franchisee's estate to an approved transferee within 120 days. This means that if a Beauty Bungalows franchisee passes away or becomes disabled, their estate has a limited time frame to find a qualified buyer who meets the franchisor's approval standards.
This requirement ensures that the Beauty Bungalows franchise continues to operate under qualified management even in unforeseen circumstances. The 120-day window provides the estate with some time to handle the transfer process, but it also creates a sense of urgency to prevent prolonged disruption of the business.
For a prospective Beauty Bungalows franchisee, this clause highlights the importance of succession planning. It would be prudent to have a plan in place that outlines who would take over the franchise in the event of death or disability, and to ensure that this individual meets the franchisor's criteria for approval. Additionally, franchisees should understand the financial implications of this transfer, including any potential transfer fees or other costs associated with assigning the franchise to a new owner.
It is also important to note that the FDD mentions state-specific addenda, so franchisees should review these addenda to understand if there are any state laws that may impact the transfer process in the event of death or disability.