Under what conditions will Beauty Bungalows approve a transfer of a Beauty Bungalows franchise?
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. |
| Q | Non-competition covenants during the term of franchise | Section 15.01 | No involvement in competing business anywhere in U.S. |
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, the franchisor has the right to approve all franchise transfers, but will not unreasonably withhold approval. For a transfer to be approved, the Beauty Bungalows franchise must be open for business to the general public at the current location. The new franchisee must meet Beauty Bungalows's qualifications, and the transfer fee must be paid.
In addition, the purchase agreement must be approved by Beauty Bungalows, and training must be arranged for the new franchisee. The franchisee must sign a general release, and the new franchisee must sign the current franchise agreement. Any broker's fees or commissions that arise from the transfer are the responsibility of the franchisee.
It is important to note that Beauty Bungalows also has the right of first refusal to acquire the franchisee's business, meaning they can match any offer made for the business. In the event of the death or disability of the franchisee, the franchise must be assigned by the estate to an approved transferee within 120 days. For a multi-unit developer relationship, Beauty Bungalows has the right to approve or not approve all transfers in its sole discretion and has sole discretion in setting conditions for its approval of a transfer.