Does the Best Brains franchise agreement specify that any transfer of interests is restricted?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
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- the ownership shares indicate that any transfer of interests is restricted and may be transferred subject to our consent only in accordance with the terms of this Agreement;
- D. Right of First Refusal. If you determine at any time to sell your rights under this Agreement, or the assets of the Franchised Business, or your ownership interest, in whole or part, you must obtain a bona fide, executed written offer from a responsible and fully disclosed purchaser and must submit an exact copy of such offer to us.
We or our designee shall, for a period of 30 days from the date of delivery of such offer to us, have the right, exercisable by written notice to you, to purchase the interest for the price and on the terms and conditions contained in the offer, provided that any brokers', agents', or finders' fees shall be deducted from the purchase price and we or our designee may substitute cash for any form of payment proposed in such offer.
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, the franchise agreement does place restrictions on the transfer of interests. Specifically, if a franchisee seeks to transfer the agreement and the assets of the franchised business to an entity, the ownership shares must indicate that any transfer of interests is restricted and may be transferred subject to Best Brains' consent, in accordance with the terms of the franchise agreement.
This means that a Best Brains franchisee cannot freely transfer ownership or control of their franchise without the franchisor's approval. This provision allows Best Brains to maintain control over who operates its franchises and ensures that any new owners meet their standards. The franchisor's consent is required for subsequent transfers of ownership within the entity as well.
Furthermore, Best Brains requires that the franchisee first offer them the opportunity to exercise a right of first refusal before transferring the franchise to a third party. The franchisee must present a bona fide, executed written offer from a prospective purchaser to Best Brains, which then has 30 days to decide whether to purchase the franchise on the same terms. This gives Best Brains significant control over who can become a franchisee and ensures that they have the first option to buy back a franchise if the owner decides to sell.