Is a gift of the Bens Soft Pretzels franchise considered a transfer under the agreement?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
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 the 2025 Bens Soft Pretzels Franchise Disclosure Document, a gift of the franchise is considered a transfer. Bens Soft Pretzels requires that any transfer of interest in the Franchise Agreement, including a gift, is subject to certain conditions. These conditions include offering Bens Soft Pretzels the right of first refusal to acquire the agreement. If Bens Soft Pretzels does not exercise this right, the franchisee must obtain prior written consent from Bens Soft Pretzels, pay a transfer fee, and satisfy other transfer conditions.
Specifically, the Bens Soft Pretzels FDD states that any transfer or arrangement where the franchisee turns over all or part of the daily operation of the business to another party who shares in the losses or profits (other than as an employee) will be considered a transfer. This broad definition includes not only sales and assignments but also bequests and gifts. Therefore, gifting a Bens Soft Pretzels franchise is treated as a transfer under the agreement.
This means that if a franchisee wishes to gift their Bens Soft Pretzels franchise to someone, they must go through the formal transfer process. This process involves satisfying several conditions, such as ensuring the recipient meets the current requirements for franchisees, paying any outstanding amounts owed to Bens Soft Pretzels or its affiliates, and obtaining a general release from all parties involved. Additionally, the recipient may need to complete the training requirements.
For a prospective Bens Soft Pretzels franchisee, this policy highlights the importance of understanding the transfer conditions outlined in the Franchise Agreement. It ensures that any change in ownership or operational control is subject to Bens Soft Pretzels's approval and oversight, maintaining the consistency and standards of the franchise system. The transfer fee, which is 50% of the then-current initial franchise fee, can be a significant cost to consider when planning for the future of the franchise.