If a Best Brains franchisee transfers to an entity, must the franchisee own and control all of the ownership interest?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
- **C.
Assignment to Entity.** If you are in full compliance with this Agreement, we shall not unreasonably withhold our consent to a transfer of this Agreement and the assets of the Franchised Business to an entity, provided:
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- the entity name does not include the word "BEST" or "BRAIN" or "BRAINS" and its activities are confined exclusively to operating your Franchised Business;
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Franchisee owns and controls all of the ownership interest and the entity assumes all of Franchisee's obligations hereunder and the owners agree 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;
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- any subsequent transfer of ownership interest in the entity shall be subject to our consent;
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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; and
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- You shall pay to us all legal expenses and other charges we incur in connection with such transfer.
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, if a franchisee wishes to transfer their franchise to an entity, they must own and control all of the ownership interest in that entity. This is a condition for Best Brains to approve the transfer.
Specifically, the franchisee must maintain complete ownership and control of the entity to which the franchise is being transferred. Additionally, the entity must assume all of the franchisee's obligations under the Franchise Agreement, and the owners of the entity must agree to be personally bound by the provisions of the agreement, guaranteeing all of the franchisee's obligations.
Furthermore, any subsequent transfer of ownership interest in the entity is subject to Best Brains' consent, and the ownership shares must indicate that any transfer of interests is restricted and can only occur with Best Brains' approval, in accordance with the terms of the Franchise Agreement. This ensures that Best Brains retains control over who operates their franchises, even after a transfer to an entity.