Under what conditions can Best Brains transfer or assign the Franchise Agreement?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
ng the term of this Agreement, directly or indirectly, offer services similar to those offered by a BEST BRAINS learning center, except under this or another franchise agreement with us.
- B. Post-Term. In the event of termination or expiration of this Agreement, including a transfer of the Franchised Business or your interest in it, you will not, directly or indirectly, for a period of two (2) years offer services similar to those offered by a BEST BRAINS learning center at or within 25 miles of your former location or within 25 miles of any BEST BRAINS location.
- C. No Solicitation. In addition, in the event of the termination or expiration of the Agreement, including a transfer of the Franchised Business or your interest in it, you will not for a two (2) year period, within the same geographic area solicit business for a learning center from any customer of the Franchised Business. If the duration, scope and/or geographic area set forth in this paragraph 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 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;
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- 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 guarantee all of Franchisee's obligations hereunder and all other agreements between Franchisee and the Company or its affiliates;
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- Upon our request, you enter into an agreement with us guaranteeing full payment and performance of the obligations of your transferee;
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- All of your monetary obligations owed to us and our affiliates are fully paid and you are not otherwise in default under this Agreement;
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- The assets of the Franchised Business are refurbished, remodeled or replaced in order to be in compliance with the then current standards and specification utilized in the granting of franchises;
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- The lessor has consented to the assignment of the lease for the Franchised Business premises to the assignee or transferee if the lease requires such a consent;
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- You pay us a transfer fee in an amount of $2,500 for the transfer of either a
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, Best Brains has the right to transfer or assign the Franchise Agreement at its sole discretion. This means Best Brains can transfer the agreement to any person or legal entity who agrees to abide by the obligations outlined in the agreement. As a franchisee, you would be required to execute documents consenting to such a transfer if Best Brains requests it.
As a Best Brains franchisee, you have some ability to transfer your interest in the Franchise Agreement, but it is subject to certain conditions and the franchisor's approval. Best Brains emphasizes that the franchise is granted to you based on your business skills, financial capacity, and personal character, which is why transfers are not freely permitted. To transfer your interest, you must first offer Best Brains the opportunity to exercise its right of first refusal. If Best Brains declines, the proposed assignee or transferee must meet several requirements, including having sufficient business experience, financial resources, and good moral character, as well as complying with Best Brains' standard training requirements and executing the current form of franchise agreement.
Additionally, to transfer the agreement, all monetary obligations owed to Best Brains and its affiliates must be fully paid, and you must not be in default under the agreement. The assets of the franchised business must be refurbished or remodeled to comply with current standards. If the lease for the premises requires consent for assignment, the lessor must consent to the assignment of the lease. You are also required to pay a transfer fee of $2,500 for either a Premium Learning Center or a Teacher Learning Center franchise. Finally, you (and each of your owners, if the franchisee is an entity) must execute releases of all claims against Best Brains, its affiliates, and their officers, directors, managers, shareholders, members, employees, and agents.
If you are in full compliance with the agreement, Best Brains will not unreasonably withhold consent to a transfer of the agreement and the assets of the franchised business to an entity, provided that the entity's name does not include "BEST," "BRAIN," or "BRAINS" and its activities are confined to operating your franchised business. The franchisee must own and control all ownership interest, and the entity must assume all of the franchisee's obligations under the agreement. The owners must agree to be personally bound by the provisions of the agreement and guarantee all of the franchisee's obligations. 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 may be transferred only with Best Brains' consent. You are also responsible for paying all legal expenses and other charges incurred by Best Brains in connection with such a transfer.