Under what circumstances can Big Air Trampoline Park refuse a transfer of ownership of a franchise?
Big_Air_Trampoline_Park Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) A provision which permits us to refuse to permit a transfer of ownership of a franchise, except for good cause.
This subdivision does not prevent us from exercising a right of first refusal to purchase the franchise.
Good cause shall include, but is not limited to:
(i) The failure of the proposed transferee to meet our then-current reasonable qualifications or standards.
(ii) The fact that the proposed transferee is a competitor of us or our subfranchisor.
(iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
(iv) Your or proposed transferee's failure to pay any sums owing to us or to cure any default in the Franchise Agreement existing at the time of the proposed transfer.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to the 2025 FDD, Big Air Trampoline Park can refuse a transfer of ownership of a franchise for "good cause." This means that Big Air Trampoline Park isn't free to arbitrarily deny a transfer, but must have legitimate business reasons.
The FDD lists several examples of what constitutes "good cause". These include if the proposed transferee doesn't meet Big Air Trampoline Park's then-current reasonable qualifications or standards. Another reason for refusal is if the proposed transferee is a competitor of Big Air Trampoline Park or its subfranchisor. Big Air Trampoline Park can also refuse the transfer if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations. Finally, Big Air Trampoline Park can refuse a transfer if the franchisee or proposed transferee has failed to pay any sums owing to Big Air Trampoline Park or to cure any default in the Franchise Agreement existing at the time of the proposed transfer.
It is important to note that this does not prevent Big Air Trampoline Park from exercising a right of first refusal to purchase the franchise. This means that even if a franchisee finds a suitable buyer, Big Air Trampoline Park has the option to buy the franchise themselves on the same terms offered by the third party. This is a fairly standard clause in franchise agreements, giving the franchisor control over who enters their system.