Must a proposed transferee of a Better Blend franchise meet the then-applicable standards for new franchisees?
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;
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, if a franchisee wants to transfer their franchise to someone else, the proposed transferee must meet Better Blend's standards for new franchisees at that time. This means the person or entity taking over the franchise will need to go through Better Blend's application process and be approved.
Better Blend may also impose other conditions on the transfer. These include receiving a transfer fee of $17,500 plus any broker fees and out-of-pocket costs, ensuring the transferee is not a competitor, and having the transferee sign Better Blend's current franchise agreement, which may have different terms than the original agreement. However, 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 outstanding amounts owed to Better Blend, its affiliates, lessors, vendors, suppliers, and lenders. The transferee and their owners and employees must also complete any required training. These conditions ensure that any new franchisee taking over an existing Better Blend location is well-qualified and financially stable, protecting the brand and the interests of other franchisees.