In the context of transferring a Best Brains franchise, what does 'encumber' mean?
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 guarante
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to the 2025 Best Brains Franchise Disclosure Document, to 'encumber' in the context of transferring a franchise means you cannot '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.'
This means that as a Best Brains franchisee, you need prior written consent from Best Brains before you can transfer any part of your interest in the franchise agreement, the franchisee entity itself, or the assets of the franchised business. This restriction applies to various forms of transfer, including selling, assigning, conveying, pledging, merging, or simply giving away your interest.
The FDD specifies that any attempt to transfer the franchise without Best Brains's written consent will be considered null and void. However, Best Brains also states that they 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's standards for franchisees, and that the transferee agrees to be bound by the franchise agreement.