What is the meaning of 'assignee' in the context of a Bens Soft Pretzels franchise transfer?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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 the 2025 Bens Soft Pretzels Franchise Disclosure Document, an 'assignee' refers to any person or entity to whom a franchisee's interest in the Franchise Agreement or the Bens Soft Pretzels store is transferred. This transfer can be in whole or in part. However, before this transfer can occur, the franchisee must first offer Bens Soft Pretzels the right of first refusal to acquire the agreement. If Bens Soft Pretzels declines, the franchisee must then obtain Bens Soft Pretzels's written consent, pay a transfer fee, and satisfy certain transfer conditions.
The FDD specifies that various actions are considered a transfer requiring adherence to these conditions. These include any sale, lease, pledge, management agreement, contract for deed, option agreement, assignment, bequest, gift, or any arrangement where the franchisee turns over daily operations to someone who shares in the business's losses or profits (excluding employees). This broad definition ensures that any significant change in control or operation of the Bens Soft Pretzels franchise is subject to the franchisor's approval.
Bens Soft Pretzels requires that the assignee meet all the then-current requirements for new franchisees. The assignee must also sign the then-current form of the franchise agreement, modified to reflect the remaining term of the original agreement. This ensures that the new operator is qualified and committed to adhering to the Bens Soft Pretzels system. The transfer process also involves financial obligations, such as paying any outstanding amounts owed to Bens Soft Pretzels, its affiliates, suppliers, or landlords. The franchisee must also provide all required reports and comply with any modernization requirements.
Furthermore, all parties involved, including the franchisee, owners, and guarantors, must sign a general release of claims against Bens Soft Pretzels and its affiliates. The assignee must also complete the required training programs, potentially at their own expense. Bens Soft Pretzels also has the right to request and receive financial reports and data related to the store's operations to evaluate the proposed transfer. This comprehensive process allows Bens Soft Pretzels to maintain control over who operates its franchises and ensures that the brand's standards and reputation are upheld.