Is a transfer of a Beef O Bradys franchise interest in a divorce considered a 'Transfer'?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
As used in this Agreement, the term "Transfer" includes your (or your Owners') voluntary, involuntary, direct or indirect assignment, sale, gift or other disposition of any interest in: (a) you; (b) this Agreement; or (c) the Family Sports Pub.
An assignment, sale, gift or other disposition includes the following events: (i) transfer of or change in ownership of capital stock or a partnership interest; (ii) merger or consolidation or issuance of additional securities or interests representing an ownership interest in you; (iii) any issuance or sale of your stock or any security convertible to your stock; (iv) transfer of an interest in you, this Agreement or the Family Sports Pub in a divorce, insolvency or corporate or partnership dissolution proceeding or otherwise by operation of law; (v) transfer of an interest in you, this Agreement or the Family Sports Pub, in the event of your death or the death of one of your Owners, by will, declaration of or transfer in trust or under the laws of intestate succession; or (vi) pledge of this Agreement (to someone other than us) or of an ownership interest in you as security, foreclosure upon the Family Sports Pub or your transfer, surrender or loss of possession, control or management of the Family Sports Pub.
Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
According to Beef O Bradys's 2025 Franchise Disclosure Document, a transfer of interest in the franchise due to divorce is considered a 'Transfer'.
The FDD states that the rights and duties within the franchise agreement are personal to the franchisee. As such, any interest in the agreement or the Family Sports Pub cannot be transferred without prior written approval from Beef O Bradys. Failure to obtain this approval constitutes a breach of the agreement and renders the transfer void.
The term 'Transfer' encompasses both voluntary and involuntary dispositions of interest, including transfers occurring as a result of divorce proceedings. This means that if a franchisee's ownership interest in a Beef O Bradys restaurant is subject to division in a divorce, it is classified as a transfer requiring franchisor approval. The franchisee must seek approval from Beef O Bradys to transfer any portion of the franchise to a spouse as part of a divorce settlement.
This requirement allows Beef O Bradys to maintain control over who operates their franchises and ensures that any new owner meets their standards for character, skill, and financial capacity. It is important for prospective franchisees to understand that transferring their interest, even in situations like divorce, requires the franchisor's consent, and failure to obtain such consent can have significant legal and financial repercussions.