Can Best Brains require the assignee or transferee to be personally bound by 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:
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- 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;
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- 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, Best Brains can require an assignee or transferee to be personally bound by the franchise agreement under certain conditions. Specifically, if a franchisee seeks to transfer their interest in the franchise, Best Brains may request that the assignee or transferee agree to be personally bound jointly and severally by all provisions of the Franchise Agreement. This includes assuming and guaranteeing all of the franchisee's obligations under the agreement and any other agreements between the franchisee and Best Brains or its affiliates.
This requirement is one of several conditions that must be met for Best Brains to approve the transfer of a franchise. Other conditions include offering Best Brains the right of first refusal, ensuring the assignee or transferee meets Best Brains' standards for franchisees, and paying a transfer fee of $2,500 for either a Premium Learning Center or a Teacher Learning Center franchise. The franchised business's assets must also be refurbished or remodeled to meet current standards.
Additionally, if a franchisee transfers the agreement to an entity, Best Brains requires that the owners of the entity agree to be personally bound by the provisions of the agreement. This ensures that Best Brains has recourse to the personal assets of the individuals controlling the entity, providing an additional layer of security for the franchisor. This is a fairly standard practice in franchising, as it protects the franchisor's interests and ensures the continued performance of the franchise agreement even after a transfer.