Under what condition can a Beef O Bradys franchisee transfer their agreement to a business entity?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.3 Transfer to a Business Entity.
Notwithstanding Section 11.2, if you are in full compliance with this Agreement, you may Transfer this Agreement to a Business Entity that conducts no business other than your Family Sports Pub businesses so long as you own, control and have the right to vote 50% or more of its issued and outstanding ownership interests (like stock or partnership interests) and you guarantee its performance under this Agreement.
Furthermore, you may not Transfer any ownership interests of 50% or more to anyone who does not meet our approval.
All Owners of 50% or more of every Family Sports Pub and of any Business Entity must meet our approval.
The organizational or governing documents of the business organization must recite that the issuance and Transfer of any ownership interests of 50% or more in the business organization are restricted by the terms of this Agreement, are subject to our approval, and all certificates or other documents representing ownership interests in the business organization must bear a legend referring to the restrictions of this Agreement.
Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
According to Beef O Bradys's 2025 Franchise Disclosure Document, a franchisee may transfer their Franchise Agreement to a business entity under specific conditions. This is an exception to the general rule that the rights and duties within the agreement are personal to the franchisee.
The primary condition is that the franchisee must be in full compliance with the existing Franchise Agreement. Additionally, the business entity to which the agreement is transferred must conduct no other business besides the franchisee's Beef O Bradys Family Sports Pub. The franchisee must retain significant control over the business entity, specifically owning, controlling, and having the right to vote at least 50% of its ownership interests.
Furthermore, the franchisee must guarantee the business entity's performance under the Franchise Agreement. Any transfer of ownership interests of 50% or more to someone who does not meet Beef O Bradys's approval is prohibited. The business entity's organizational documents must also state that any transfer of 50% or more of the ownership interests is restricted by the terms of the Franchise Agreement and is subject to Beef O Bradys's approval. All ownership certificates must bear a legend referring to these restrictions.