Under what conditions can Bft unreasonably withhold consent for a proposed franchise transfer?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
for the premises at which the Studio is located, or in the control or management of the Studio (each a "Transfer"), and any purported Transfer shall be null and void. If Franchisee is a corporation, limited liability, partnership, or an individual or group of individuals, any assignment (or new issuance), directly or indirectly, occurring as a result of a single transaction or a series of transactions that alters the percentages of ownership interests reflected on Exhibit 1 to this Agreement must promptly be reported to Franchisor and is a Transfer within the meaning of this Article 14. Any proposed Transfer shall be subject to Franchisor's right of first refusal provided in Section 14.5 below.
- 14.2 Conditions for Consent of Transfer. Franchisee must provide Franchisor with all information or doc
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft will not unreasonably withhold consent for a proposed franchise transfer if the prospective transferee, in Bft's reasonable judgment, meets certain criteria. These criteria include demonstrating good moral character and reputation, having no conflicting interests, possessing a good credit rating, and having sufficient and competent business experience, aptitude, and financial resources that are acceptable to Bft's then-current standards for franchisees. These judgments are based on satisfactory background and credit checks conducted by reputable agencies and sources, including bankruptcy searches, criminal and litigation histories, United States Office of Foreign Assets Control searches, and politically exposed persons PEP searches.
In practical terms, this means that if a Bft franchisee finds a buyer who meets Bft's standards for a new franchisee, Bft is obligated to approve the transfer. This protects the franchisee's ability to sell their business. However, Bft retains the right to assess the buyer based on its current criteria for franchisees, ensuring that any new franchisee is qualified to maintain the standards of the Bft brand.
It is important to note that the franchisee must also pay Bft a transfer fee of $10,000 for the transfer to be approved. This fee is a standard practice in franchising and is intended to cover Bft's costs associated with reviewing the transfer application and onboarding the new franchisee. Franchisees should ensure that the prospective buyer is aware of these requirements and is prepared to meet them before proceeding with the transfer.