What is the relationship between the Franchise Agreement and the Asset Purchase Agreement for a Beverly Anns Cookie franchise?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
New Franchisee acknowledges and agrees that the purchase of the rights to the Franchised Business ("Transaction") occurred solely between Former Franchisee and New Franchisee.
New Franchisee also acknowledges and agrees that Franchisor played no role in the Transaction and that Franchisor's involvement was limited to the approval of Requested Assignment and any required actions regarding New Franchisee's signing of the New Franchise Agreement for the Franchised Business.
New Franchisee agrees that any claims, disputes, or issues relating New Franchisee's acquisition of the Franchised Business from Franchisee are between New Franchisee and Former Franchisee, and shall not involve Franchisor.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, the Asset Purchase Agreement is relevant when a franchisee acquires an existing Beverly Anns Cookie business through a transfer. In these cases, the franchisee purchases the assets of the business, such as the truck and equipment, from the former franchisee. This transaction is separate from the Franchise Agreement itself, as the franchisor, Mobile Cookie Company, LLC, plays no role in the asset purchase negotiations or terms. The franchisor's involvement is limited to approving the transfer and ensuring the new franchisee signs a new Franchise Agreement.
Specifically, the Franchise Agreement outlines the obligations and responsibilities of both the franchisor and the franchisee. When a transfer occurs, a new franchisee must execute a new Franchise Agreement, potentially with amendments specific to the transfer. One key amendment is that the new franchisee has already acquired the assets, such as the truck and equipment, under Section 13.13 of the Franchise Agreement. This section is amended to reflect that the asset acquisition has already occurred. Additionally, the new franchisee acknowledges that the asset purchase is solely between the new and former franchisees, with the franchisor having limited involvement.
In essence, the Asset Purchase Agreement facilitates the transfer of tangible assets from the former franchisee to the new franchisee, while the Franchise Agreement governs the relationship between the franchisor and the new franchisee. The franchisor approves the transfer and ensures the new franchisee meets the brand's standards and obligations through the new Franchise Agreement. The new franchisee is responsible for negotiating the terms of the asset purchase directly with the former franchisee, independent of the franchisor.