What is excluded from being considered a 'Permitted Transfer' for a Bigfoot Forestry franchise?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Permitted Transfer" means a Transfer: (a) between existing Owners; (b) by the Owners to a new Developer Entity for which such Owners collectively own and control 100% of the Equity Interests; or (c) of less than 20% of the Equity Interests in the Development Business or Developer Entity; provided, however, that a Permitted Transfer does not include any Transfer that results in the Managing Owner owning less than 20% of the Equity Interests in the Development Business or Developer Entity.
Source: Item 23 — RECEIPT (FDD pages 42–162)
What This Means (2025 FDD)
According to the 2025 Bigfoot Forestry FDD, a 'Permitted Transfer' includes transfers between existing owners, transfers by owners to a new Developer Entity where the owners maintain 100% ownership and control, and transfers of less than 20% of the Equity Interests in the Development Business or Developer Entity. However, the document specifies an important exception.
Specifically, a transfer is not considered a 'Permitted Transfer' if it results in the Managing Owner owning less than 20% of the Equity Interests in the Development Business or Developer Entity. This means that even if a transfer meets the other criteria for being 'Permitted', it will not be considered as such if the Managing Owner's equity falls below the 20% threshold.
This condition is significant for prospective Bigfoot Forestry franchisees because it restricts the ability of the Managing Owner to reduce their stake in the business below a certain level without requiring franchisor approval. This ensures that the Managing Owner maintains a significant interest in the business's operations and success. Franchisees should carefully consider these restrictions on equity transfers and discuss any potential concerns with the franchisor before entering into a franchise agreement.