If a Bee Organized franchisee is in default, can they transfer their franchise?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
| j. | Assignment | 14.A. | No restriction on our right to assign. |
|---|---|---|---|
| of the contract by franchisor | |||
| k. | "Transfer" by franchisee definition | 14.B. | A transfer means and includes, whether voluntary or involuntary, conditional or unconditional, direct or indirect: (a) an assignment, sale, gift, transfer, pledge or sub-franchise; (b) the grant of a mortgage, charge, lien or security interest, including, without limitation, the grant of a collateral assignment; (c) a merger, consolidation, exchange of shares or other ownership interests, issuance of additional ownership interests or securities representing or potentially representing ownership interests, or redemption of ownership interests; and (d) a sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any holder of ownership interests or to control the operations or affairs of Franchisee. |
| l. | Franchisor's approval of transfer by franchisee | 14.B. | Transfers require our prior written consent, which may be granted or withheld in our discretion. |
| m. | Conditions for franchisor's approval of transfer | 14.C. | For approval of your transfer, you must provide us with 30 days prior written notice of the proposed transfer; you and your Owners must not have defaulted in your obligations under the Franchise Agreement and all other agreements with us; you and your Owners must be in compliance with your obligations under the Franchise Agreement and all other agreements with us; the transferee must agree to be bound by all of the terms and provisions of the Franchise Agreement; the transferee's owners and their spouses must personally guarantee all of the terms and provisions of the Franchise Agreement; you and your Owners and their spouses must sign a general release in favor of us; the transfer must provide for the assignment and/or ownership of the approved location for the Franchised Business, and the transferee's continued use and occupancy of such location throughout the term of the Franchise Agreement; the assets of the Franchised Business must be transferred to the transferee; the transferee and the transferee's owners and managers, at the transferee's expense, must complete our training programs; we waive our right of first refusal; we approve of the transfer and |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 35–40)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, a franchisee's ability to transfer the franchise is contingent upon not being in default. Specifically, both the franchisee and their owners must not be in default of their obligations under the Franchise Agreement or any other agreements with Bee Organized at the time of the proposed transfer.
This condition means that if a Bee Organized franchisee has failed to meet their financial obligations, operational standards, or any other requirements outlined in the Franchise Agreement, they will likely be unable to transfer the franchise to a new owner. This provision protects Bee Organized by ensuring that new franchisees are not inheriting businesses already in a state of non-compliance or financial distress.
It is important for prospective Bee Organized franchisees to understand that maintaining compliance with the Franchise Agreement is crucial not only for the ongoing operation of the business but also for retaining the option to sell or transfer the franchise in the future. If a franchisee anticipates needing to transfer the business, they should ensure they are in good standing with Bee Organized to facilitate the transfer process.