Does a contract for deed related to a Bens Soft Pretzels franchise constitute a transfer?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that the following provisions govern any transfer or proposed transfer:
- A. Transfers. We have entered into this Agreement with specific reliance upon your financial qualifications, experience, skills and managerial qualifications as being essential to the satisfactory operation of the Store. Consequently, neither your interest in this Agreement nor in the
Store may be transferred or assigned to or assumed by any other person or entity (the "assignee"), in whole or in part, unless you have first tendered to us the right of first refusal to acquire this Agreement in accordance with subparagraph 11.F, and, if we do not exercise such right, unless our prior written consent is obtained, the transfer fee provided for in subparagraph 11.C is paid, and the transfer conditions described in subparagraph 11.D are satisfied. Any sale (including installment sale), lease, pledge, management agreement, contract for deed, option agreement, assignment, bequest, gift or otherwise, or any arrangement pursuant to which you turn over all or part of the daily operation of the business to a person or entity who shares in the losses or profits of the business in a manner other than as an employee will be considered a transfer for purposes of this Agreement. Specifically, but without limiting the generality of the foregoing, the following events constitute a transfer and you must comply with the right of first refusal, consent, transfer fee, and other transfer conditions in this Paragraph 11:
Source: Item 22 — CONTRACTS (FDD pages 46–47)
What This Means (2025 FDD)
According to Bens Soft Pretzels's 2025 Franchise Disclosure Document, a contract for deed is considered a transfer of the franchise. This means that if a franchisee enters into a contract for deed, it is treated the same as selling or assigning the franchise to another party.
For a prospective Bens Soft Pretzels franchisee, this has significant implications. If they wish to transfer their franchise through a contract for deed, they must first offer Bens Soft Pretzels the right of first refusal to acquire the franchise. If Bens Soft Pretzels declines, the franchisee must then obtain Bens Soft Pretzels's written consent, pay a transfer fee, and ensure that all transfer conditions are met. These conditions include the assignee meeting Bens Soft Pretzels's current requirements for franchisees, paying all outstanding amounts owed to Bens Soft Pretzels and its affiliates, providing all required reports, and complying with modernization requirements.
Additionally, the franchisee, owners, and guarantors must sign a general release of all claims against Bens Soft Pretzels and its affiliates. The assignee must also comply with Bens Soft Pretzels's training requirements. Bens Soft Pretzels also has the right to request financial reports and data related to the store's operations to evaluate the proposed transfer. Failing to comply with these transfer provisions could result in a breach of the franchise agreement.