What constitutes an ownership change that would be considered a 'transfer' of a Bens Soft Pretzels franchise?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Agreement | Summary | |
|---|---|---|---|
| o. | Franchisor’s option to purchase franchisee’s business | Section 14B | Option to purchase some or all equipment, supplies, inventory, advertising materials and any items with our logo, for cash at fair market value, exercisable up to 90 days after termination or expiration. If no agreement on fair market value, an appraiser appointed by us will decide. |
| p. | Death or disability of franchisee | Section 11E | You must assign franchise to an approved buyer within 180 days. All transfer provisions of section 8 of the franchise agreement apply. |
| q. | Non-competition covenants during the term of the franchise | Section 10D | No store or food business which includes the sale of pretzels where the sale of pretzels is more than 10% of the overall revenue of the business, nor an organization franchising a similar business (subject to state law). |
| r. | Non-competition covenants after the franchise is terminated or expires | Section 10D | No store or food business which includes the sale of pretzels where the sale of pretzels is more than 10% of the overall revenue of the business for 1 year within 5 miles of your former store location, or within 5 miles of any other BEN’S SOFT PRETZELS store. No organization franchising a similar business for 1 year. No solicitation or acceptance of business from former customers for 1 year (subject to state law). |
| s. | Modification of agreement | Section 15B | Modification by written agreement signed by you and us. The Operations Manual can be revised and modified by us. |
| t. | Integration/merger clause | Section 15B | Only the terms of the Franchise Agreement (including System Standards in the Operations Manual) are binding (subject to state and federal law). Any statements or promises not in the Franchise Agreement and this disclosure document and may not be enforceable. No claim made in any franchise agreement is intended to disclaim the representations made in this Franchise Disclosure Document. |
| u. | Dispute resolution by arbitration or mediation | Section 12 | Except for certain claims, all disputes must be mediated and arbitrated in the city where our headquarters is located when the proceedings are conducted, currently Goshen, Indiana (subject to state law). |
| v. | Choice of forum | Section 15I | Court litigation must be in any state or federal court of general jurisdiction over Goshen, Indiana (or where our headquarters is located when the proceedings are conducted). (subject to state law). |
| w. | Choice of law | Section 15H | Except for the Federal Arbitration Act and other federal law, Indiana law applies (subject to state law). |
| Provision | Section in Agreement | Summary | |
| i. | Franchisee's | Section 4C | Pay amounts owed; return the Operations Manual and Software |
| obligations on termination/non renewal | Section 14A-14C | Program and return or destroy all other materials; stop using Marks, System and confidential information; de-identify yourself from us; cancel assumed names; return to us any signs utilizing the Marks; provide us with the names, addresses, telephone numbers and email addresses of all customers; assign to us your telephone and facsimile numbers, and email and internet addresses, websites, domain names, social media sites and search engine identifiers; assign your lease to us, at our option; adhere to non-competition provisions. (also see r, below) | |
| j. | Assignment of contract by franchisor | Section 11G | No restriction on our right to assign. |
| k. | "Transfer" by franchisee – defined | Section 11A | Includes any type of transfer of the Franchise Agreement or assets or any ownership change. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 34–37)
What This Means (2025 FDD)
According to Bens Soft Pretzels' 2025 Franchise Disclosure Document, a 'transfer' of a franchise includes any type of transfer of the Franchise Agreement, the franchise's assets, or any ownership change. This definition is broad and encompasses various scenarios where the control or ownership of the franchise shifts from one party to another.
For a prospective Bens Soft Pretzels franchisee, this means that any change in ownership structure, whether through the sale of the business, transfer of assets, or changes in the ownership of the franchisee entity (if it's a corporation, LLC, or partnership), will be considered a transfer. This is a critical point because all transfers are subject to the franchisor's approval, as detailed in Section 11B of the Franchise Agreement.
Bens Soft Pretzels retains the right to approve all transfers, and while they state they will not unreasonably withhold approval, franchisees must still meet certain conditions for the transfer to be approved. These conditions include ensuring the transferee (the new owner) meets the franchisor's qualifications, all outstanding payments are settled, the store is up to the franchisor's standards, and the transferee signs the current Franchise Agreement. Additionally, Bens Soft Pretzels has the right of first refusal to acquire the franchisee's business, allowing them to match any offer made by a potential buyer.