Can Better Blend transfer or assign the Franchise Agreement without the Franchisee's consent?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
to third parties. If any of the assets are subject to a lien, BBF may pay a portion of the purchase price directly to the lienholder to pay off such lien. BBF may withhold 25% of the purchase price for 90 days to ensure that all of Franchisee'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 comp
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, Better Blend can transfer or assign the Franchise Agreement without the franchisee's consent. Specifically, Better Blend has the right to transfer the agreement, or its rights and obligations within the agreement, to another person or entity without needing approval from the franchisee. Additionally, Better Blend can undergo changes in ownership or control without the franchisee's consent.
However, the franchisee's ability to transfer the agreement is limited. The franchisee must provide Better Blend with at least 60 days' notice before any proposed transfer and must obtain Better Blend's consent. Better Blend can impose conditions on the transfer, including receiving a transfer fee of $17,500 plus any broker fees and out-of-pocket costs. The proposed transferee must also meet Better Blend's standards for new franchisees and execute the then-current form of the franchise agreement, which may contain materially different provisions.
These stipulations regarding transfer rights are typical in franchising. Franchisors like Better Blend often retain the freedom to transfer agreements to maintain flexibility in their business operations. On the other hand, the restrictions placed on franchisees are designed to ensure that any transfer aligns with the franchisor's standards and protects the brand's integrity. Prospective franchisees should carefully consider these transfer provisions and discuss any concerns with Better Blend before entering into an agreement.