Does Better Blend need Franchisee consent to undergo a change in ownership?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.13 Temporary Management. If (i) the Principal Executive dies or becomes incapacitated, (ii) this Agreement is terminated or expires and BBF elects to purchase assets of the Business as provided in Section 14.6, or (iii) Franchisee is operating the Business in a manner which, in BBF's reasonable opinion, constitutes a danger to the health or safety of any person, then BBF may (but is not obligated to) enter the Location and operate and manage the Business for Franchisee's (or Franchisee's estate's) account until this Agreement is terminated, the Business is transferred, the Business is purchased by BBF, or BBF returns the Business to Franchisee.
BBF's operation and management will not continue for more than 90 days without Franchisee's consent (or the consent of the representatives of Franchisee's estate).
If this Agreement has not terminated or expired, then BBF will account to Franchisee for all net income from the Business during the period in which BBF operates the Business.
BBF may collect a temporary management fee equal to 10% of Adjusted Gross Sales for the period in which BBF operates the Business, plus all expenses
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, the Better Blend franchise agreement does not explicitly require the franchisor, Better Blend Franchising, LLC (BBF), to obtain franchisee consent for a change in ownership. The agreement outlines various rights and obligations of both the franchisor and franchisee, including conditions under which BBF may temporarily manage the business.
Specifically, BBF can operate and manage the Better Blend business for up to 90 days without the franchisee's consent under certain circumstances, such as the death or incapacitation of the Principal Executive, termination or expiration of the agreement with BBF electing to purchase assets, or if the franchisee operates the business in a manner that endangers health or safety. After 90 days, the consent of the franchisee (or their estate's representatives) is required for continued management by BBF.
While the FDD details BBF's rights regarding temporary management and brand accounts, it does not address the need for franchisee consent in the event of a change in the franchisor's ownership. A prospective franchisee should seek clarification from Better Blend regarding their policies on franchisor ownership changes and any potential impact on the franchise agreement.