What constitutes 'good cause' for Best Western to refuse a transfer of ownership of a franchise in Michigan?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) A provision which permits a franchisor to refuse to permit a transfer or ownership of a franchise, except for good cause. This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise. Good cause shall include, but is not limited to:
- (i) The failure of the proposed transferee to meet the franchisor's then current reasonable qualifications or standards.
- (ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor.
- (iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
- (iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, specifically Item 23, Michigan law dictates what constitutes 'good cause' for Best Western to refuse a transfer of ownership. This includes several specific reasons.
Best Western can refuse a transfer if the proposed transferee does not meet the brand's current reasonable qualifications or standards. Another valid reason is if the proposed transferee is a competitor of Best Western. Additionally, refusal is permitted if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations associated with the franchise agreement.
Finally, Best Western can refuse a transfer if either the current franchisee or the proposed transferee has failed to pay any sums owed to Best Western or has failed to correct any existing default in the franchise agreement at the time of the proposed transfer. However, this does not prevent Best Western from exercising a right of first refusal to purchase the franchise.