How much prior notice must a Franchisee provide to Better Blend before a proposed transfer?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
anchisee's taxes and other liabilities are paid. BBF may assign this purchase option to another party.
ARTICLE 15. TRANSFERS
- 15.1 By BBF. BBF may transfer or assign this Agreement, or any of its rights or obligations under this Agreement, to any person or entity, and BBF may undergo a change in ownership and/or control, without the consent of Franchisee.
- 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that BBF entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing BBF at least 60 days prior notice of the proposed Transfer, and without obtaining BBF's consent. In granting any such consent, BBF may impose conditions, including, without limitation, the following:
- (i) BBF receives a transfer fee equal to $17,500 plus any broker fees and other out-ofpocket costs incurred by BBF;
- (ii) the proposed Transferee and its owners have completed BBF's franchise application processes, meet BBF's then-applicable standards for new franchisees, and have been approved by BBF as franchisees;
- (iii) the proposed Transferee is not a Competitor;
- (iv) the proposed Transferee executes BBF's then-current form of franchise agreement and any related documents, which form may contain materially different provisions
- than this Agreement (provided, however, that the form will be amended to provide that the proposed Transferee will not be required to pay an initial franchise fee);
- (v) all owners of the proposed Transferee provide a guaranty in accordance with Section 2.5;
- (v
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, a franchisee must provide Better Blend with at least 60 days prior notice before undergoing a transfer of the franchise. This requirement acknowledges that the rights and duties within the franchise agreement are personal to the franchisee, and Better Blend has entered into the agreement based on the franchisee's skills, financial capacity, character, experience, and business ability.
This advance notice allows Better Blend to assess the proposed transfer and the potential transferee. Better Blend may impose conditions on the transfer, including receiving a transfer fee of $17,500 plus any broker fees and out-of-pocket costs incurred by Better Blend. The proposed transferee must also complete Better Blend's franchise application process, meet the then-applicable standards for new franchisees, and be approved by Better Blend. The transferee cannot be a competitor and must execute Better Blend's current form of franchise agreement, which may contain materially different provisions, although the transferee will not be required to pay an initial franchise fee.
Additionally, all owners of the proposed transferee must provide a guaranty, and the franchisee must have paid all monetary obligations to Better Blend, its affiliates, and any lessor, vendor, supplier, or lender to the business. The franchisee must not be in default or breach of the agreement or any other obligation owed to Better Blend or its affiliates. The proposed transferee and its owners and employees must also undergo any training that Better Blend may require. These conditions ensure that any transfer maintains the standards and financial health of the Better Blend franchise system.