If a Best Brains franchisee is transferring the franchise, is it a requirement that they are not otherwise in default under the franchise agreement?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
aph and Agreement are held to be unreasonable and therefore unenforceable by any court of competent jurisdiction, then the duration, scope and/or geographic area of the foregoing restrictions and agreements shall remain in full force and effect as to such maximum duration, scope and/or geographic area as the court shall allow.
9. TRANFERABILITY OF INTEREST.
- A. Transfer by the Company. We shall have the right, in our sole discretion, to transfer or assign this Agreement and all or any part of its rights or obligations to any person or legal entity who agrees to abide by the obligations in this Agreement. You shall execute such documents consenting to such a transfer as we request.
- B. Transfer by Franchisee. You understand and acknowledge that the rights and duties set forth in this Agreement are personal to you, and that we have granted this franchise in reliance on your business skill, financial capacity, and personal character.
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
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, a franchisee must not be in default under the franchise agreement to transfer their interest. Specifically, all monetary obligations owed to Best Brains and its affiliates must be fully paid, and the franchisee must not otherwise be in default under the agreement. This is one of several conditions that must be met for Best Brains to approve the transfer.
In addition to not being in default, the franchisee must first offer Best Brains the opportunity to exercise its right of first refusal. The potential assignee or transferee must also meet Best Brains' standards for franchisees, including having sufficient business experience, aptitude, and financial resources. The transferee must also comply with Best Brains' training requirements, receive the required disclosure documents, and execute the current form of franchise agreement.
Furthermore, the assets of the franchised business must be refurbished, remodeled, or replaced to comply with the current standards. The lessor must consent to the assignment of the lease if required by the lease terms. The franchisee must also pay a transfer fee of $2,500 for either a Premium Learning Center or a Teacher Learning Center franchise. Finally, the franchisee and their owners must execute releases of all claims against Best Brains and its affiliates.
These conditions ensure that any transfer of the franchise maintains the standards and financial health of the Best Brains system. A prospective franchisee should be aware of these requirements, as they could impact the ability to sell the franchise in the future.