Under what conditions will Best Brains not unreasonably withhold approval of a transfer by the franchisee?
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 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 curren
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, Best Brains will not unreasonably withhold written approval of a franchise transfer if certain conditions are met. These conditions include the franchisee properly offering Best Brains the opportunity to exercise its right of first refusal and Best Brains declining this opportunity. Additionally, the proposed transferee must meet Best Brains' standards for franchisees at the time of the transfer, including having sufficient business experience, aptitude, and financial resources, as well as demonstrating good moral character and complying with standard training requirements. The transferee must also receive the required disclosure documents and execute the current form of the franchise agreement.
Furthermore, upon Best Brains' request, the transferee must agree to be personally bound by all provisions of the franchise agreement and guarantee the franchisee's obligations. The current franchisee may also be required to enter into an agreement guaranteeing the transferee's obligations. All monetary obligations owed to Best Brains and its affiliates must be fully paid, and the franchisee must not be in default under the agreement. The franchised business's assets must be refurbished or replaced to comply with current standards. If the premises lease requires consent for assignment, the lessor must consent to the assignment of the lease to the transferee. Finally, the franchisee must pay Best Brains a transfer fee of $2,500 for either a Premium Learning Center or a Teacher Learning Center franchise, and execute releases of all claims against Best Brains and its affiliates.
These conditions are typical in franchising, as franchisors want to ensure that any new franchisee meets their standards and is capable of running the business successfully. The transfer fee helps to cover the costs associated with the transfer process. The right of first refusal allows Best Brains to repurchase the franchise if they so choose, maintaining control over their brand and network. The requirement for refurbishment ensures that the business continues to meet brand standards, which is important for maintaining consistency across the Best Brains system.