Under what conditions can Bee Organized refuse to permit a transfer of ownership of a franchise?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
- G.
A provision that permits us to refuse to permit a transfer of ownership of a franchise, except for good cause.
The subdivision does not prevent us from exercising a right of first refusal to purchase the franchise.
Good cause shall include, but is not limited to:
(i) The failure of the proposed transferee to meet our then current reasonable qualifications or standards.
(ii) The fact that the proposed transferee is our or Sub-franchisor's competitor.
(iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
(iv) Your or proposed transferee's failure to pay us any sums or to cure any default in the Franchise Agreement existing at the time of the proposed transfer.
14.C. CONDITIONS FOR APPROVAL OF TRANSFER
Provided Franchisee and each Owner and Spouse, respectively, are in substantial compliance with this Agreement and the Ancillary Agreements, and Franchisor does not elect to exercise Franchisor's right of first refusal as set forth in Article 14.F. below, Franchisor shall not unreasonably withhold its approval of a Transfer by Franchisee or an Owner. The proposed transferee (including such assignee's owner(s) and spouse(s) if the proposed transferee is a Corporate Entity) must be of good moral character, have sufficient business experience, aptitude and financial resources to own and operate a Bee Organized Business, and otherwise meet Franchisor's then applicable standards for franchisees as determined by Franchisor in its sole, but reasonable discretion. Furthermore, the proposed transferee and the proposed transferee's owners and spouses may not own or operate, or intend to own or operate, a Competitive Business. Franchisee agrees that Franchisor may condition approval of a Transfer upon Franchisee's satisfaction (either before, or contemporaneously with, the effective date of the Transfer) of the following:
- (1) Franchisee must provide written notice to Franchisor of the proposed Transfer of this Agreement at least 30 days prior to the Transfer, and Franchisee must have also satisfied the obligations set forth in Article 14.F. below;
- (2) All accrued monetary obligations of Franchisee and all other outstanding obligations to Franchisor and/or Franchisor's affiliates under this Agreement and the Ancillary Agreements must be satisfied in a timely manner, and Franchisee must satisfy all trade, supplier, and vendor accounts and other debts, of whatever nature or kind, in a timely manner;
- (3) Franchisee, each Owner, and each Spouse must not be in default or material breach of this Agreement or the Ancillary Agreements;
- (4) The transferee shall be bound by all terms and conditions of this Agreement, and each owner of the transferee and their respective spouses shall personally execute the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1;
- (5) All obligations of Franchisee under this Agreement and the Ancillary Agreements shall be assumed by the transferee, each individual owner of transferee, and their respective spouses in a manner satisfactory to Franchisor;
- (6) Franchisee, each Owner, and each Spouse must execute the General Release attached to this Agreement as Exhibit 5 releasing Franchisor, Franchisor's affiliates and Franchisor's past and present officers, directors, shareholders, members, partners, agents, representatives, independent contractors, servants and employees, of any and all claims against Franchisor for matters arising on, or before, the effective date of the Transfer;
Source: Item 23 — RECEIPTS (FDD pages 54–218)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, there are several conditions under which they can refuse to permit a transfer of ownership of a franchise. Bee Organized cannot refuse a transfer of ownership of a franchise except for good cause. Good cause includes if the proposed transferee fails to meet Bee Organized's then current reasonable qualifications or standards. Another cause is if the proposed transferee is Bee Organized's or a Sub-franchisor's competitor. Bee Organized can also refuse a transfer if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations. Finally, Bee Organized can refuse a transfer if the franchisee or proposed transferee fails to pay any sums or cure any default in the Franchise Agreement at the time of the proposed transfer.
In addition to 'good cause' reasons, Bee Organized can also refuse a transfer if the franchisee and each owner and spouse are not in substantial compliance with the Franchise Agreement and Ancillary Agreements. Bee Organized can also refuse a transfer if they elect to exercise their right of first refusal. The proposed transferee must be of good moral character, have sufficient business experience, aptitude, and financial resources to own and operate a Bee Organized Business, and otherwise meet Bee Organized's then applicable standards for franchisees as determined by Bee Organized in its sole, but reasonable discretion. Furthermore, the proposed transferee and the proposed transferee's owners and spouses may not own or operate, or intend to own or operate, a Competitive Business.
Bee Organized may also condition approval of a Transfer upon the franchisee's satisfaction of several conditions. The franchisee must provide written notice to Bee Organized of the proposed Transfer of the Agreement at least 30 days prior to the Transfer, and the Franchisee must have also satisfied the obligations set forth in Article 14.F. All accrued monetary obligations of the franchisee and all other outstanding obligations to Bee Organized and/or Bee Organized's affiliates under the Agreement and the Ancillary Agreements must be satisfied in a timely manner, and the franchisee must satisfy all trade, supplier, and vendor accounts and other debts, of whatever nature or kind, in a timely manner. The franchisee, each Owner, and each Spouse must not be in default or material breach of this Agreement or the Ancillary Agreements.
The transferee shall be bound by all terms and conditions of the Agreement, and each owner of the transferee and their respective spouses shall personally execute the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1. All obligations of the franchisee under this Agreement and the Ancillary Agreements shall be assumed by the transferee, each individual owner of transferee, and their respective spouses in a manner satisfactory to Bee Organized. The franchisee, each Owner, and each Spouse must execute the General Release attached to this Agreement as Exhibit 5 releasing Bee Organized, Bee Organized's affiliates and Bee Organized's past and present officers, directors, shareholders, members, partners, agents, representatives, independent contractors, servants and employees, of any and all claims against Bee Organized for matters arising on, or before, the effective date of the Transfer.