What constitutes an unauthorized transfer or assignment by a Best Brains franchisee that could lead to termination?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
Accordingly, you may not sell, assign, transfer, convey, pledge, encumber, merge, or give (collectively "transfer") away any direct or indirect interest in this Agreement, in Franchisee, or in all or substantially all of the assets of the Franchised Business without our prior written consent. Any purported assignment or transfer not having our written consent shall be null and void.
We shall not unreasonably withhold its written approval of an assignment or transfer, provided:
You have properly offered us the opportunity to exercise the right of first refusal as provided in the right of first refusal section of this Agreement, and we declined to exercise it;
The assignee or transferee has sufficient business experience, aptitude, financial resources, meets our then applicable standards for franchisees, is of good moral character, will comply with our standard training requirements, has received the required disclosure documents in accordance with law, and executes the then current form of franchise agreement and other agreements;
Upon our request, the assignee or transferee agrees in a form approved by us to be personally bound jointly and severally by all the provisions of this Agreement and assume and guarantee all of Franchisee's obligations hereunder and all other agreements between Franchisee and the Company or its affiliates;
Upon our request, you enter into an agreement with us guaranteeing full payment and performance of the obligations of your transferee;
All of your monetary obligations owed to us and our affiliates are fully paid and you are not otherwise in default under this Agreement;
The assets of the Franchised Business are refurbished, remodeled or replaced in order to be in compliance with the then current standards and specification utilized in the granting of franchises;
The lessor has consented to the assignment of the lease for the Franchised Business premises to the assignee or transferee if the lease requires such a consent;
You pay us a transfer fee in a
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, a franchisee is prohibited from transferring any interest in the Franchise Agreement, the franchisee entity, or the assets of the franchised business without prior written consent from Best Brains. Any attempt to transfer without this consent will be considered void.
Best Brains will not unreasonably withhold approval for a transfer if certain conditions are met. These conditions include offering Best Brains the right of first refusal, ensuring the transferee meets Best Brains' standards for franchisees (business experience, financial resources, moral character, and compliance with training), and requiring the transferee to execute the current franchise agreement. Additionally, the franchisee must ensure all monetary obligations to Best Brains are paid, the franchised business assets are refurbished to current standards, and the lessor consents to the lease assignment if required.
Further conditions for transfer approval involve the transferee agreeing to be personally bound by the franchise agreement and related obligations, and the franchisee may need to guarantee the transferee's performance. The franchisee is also responsible for paying a transfer fee, though the specific amount is not mentioned in this section. Failing to meet these requirements or attempting a transfer without Best Brains' written consent could lead to a breach of the franchise agreement and potential termination.