In Michigan, under what conditions can Bigfoot Forestry refuse a transfer of ownership of a franchise?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
- 19.2. By You. The rights and duties created by this Agreement are personal to you and the Owners. We are granting you franchise rights in reliance upon the character, skill, attitude, business ability and financial resources of you and your Owners. Because this Agreement is a personal services contract, neither you nor any Owner may engage in a Transfer (other than a Permitted Transfer) without our prior approval. Any Transfer (other than a Permitted Transfer) without our approval is void and constitutes a breach of this Agreement. We will not unreasonably withhold our approval of a proposed Transfer if all of the following conditions are satisfied:
- (a) we believe the proposed transferee has sufficient business experience, aptitude and financial resources to own and operate a Bigfoot Forestry Business and meets our minimum criteria for franchisees;
- (b) you and your affiliates and Owners are in full compliance with all Definitive Agreements;
- (c) the transferee's owners successfully complete, or make arrangements to attend, the initial training program and the transferee pays us any applicable training fee;
- (d) the transferee and its owners obtain all licenses and permits required by applicable Law to own and operate the Bigfoot Forestry Business;
- (e) the transferee: (i) agrees to guarantee and perform your obligations under this Agreement and
- (e) you or the transferee pay us a $10,000 transfer fee (in addition to the transfer fee, you must reimburse us for any commission we pay our broker if our broker finds the transferee);
- (f) you assign all Franchise Agreements to the transferee in accordance with the transfer provisions under each such Franchise Agreement, including payment of any transfer fee imposed under each such Franchise Agreement;
- (g) you and your Owners sign a General Release;
- (h) we choose not to exercise our right of first refusal described in §7.5; and
- (i) you or the transferring Owner, as applicable, and the transferee satisfy all other conditions we reasonably require as a condition to our approval of the Transfer.
You may not: (a) transfer less than all development rights remaining under this Agreement (i.e., you may not retain the right to develop any Bigfoot Forestry Business); or (b) transfer your development rights to multiple transferees. Our consent to a Transfer shall not constitute a waiver of any Claims we may have against the transferor or our right to demand the transferee comply with all terms of the area development agreement.
Source: Item 23 — RECEIPT (FDD pages 42–162)
What This Means (2025 FDD)
According to Bigfoot Forestry's 2025 Franchise Disclosure Document, the company can refuse a transfer of ownership if certain conditions are not met. Bigfoot Forestry is granting franchise rights based on the character, skill, attitude, business ability, and financial resources of the franchisee and their owners. Because the Franchise Agreement is a personal services contract, any transfer, other than a 'Permitted Transfer', requires prior approval from Bigfoot Forestry. A 'Permitted Transfer' includes transfers between existing owners, to a new Developer Entity wholly owned and controlled by the existing owners, or of less than 20% of the Equity Interests in the Development Business or Developer Entity, provided the Managing Owner still owns at least 20%.
Bigfoot Forestry will not unreasonably withhold approval of a proposed transfer if all specified conditions are satisfied. These conditions include the belief that the proposed transferee has sufficient business experience, aptitude, and financial resources to operate the Bigfoot Forestry Business and meets the franchisor's minimum criteria for franchisees. Additionally, the franchisee, their affiliates, and owners must be in full compliance with all Definitive Agreements. The transferee's owners must also successfully complete the initial training program or make arrangements to attend, and pay any applicable training fee. Furthermore, the transferee and its owners must obtain all required licenses and permits to operate the Bigfoot Forestry Business.
The transferee must agree to guarantee and perform the franchisee's obligations under the Franchise Agreement. The franchisee or transferee must pay a $10,000 transfer fee, and reimburse Bigfoot Forestry for any commission paid to a broker if the broker found the transferee. All Franchise Agreements must be assigned to the transferee according to the transfer provisions, including payment of any transfer fee. The franchisee and their owners must sign a General Release, and Bigfoot Forestry must choose not to exercise its right of first refusal. Finally, the transferring owner and the transferee must satisfy all other conditions reasonably required by Bigfoot Forestry for approval of the transfer.
The franchisee cannot transfer less than all development rights, meaning they cannot retain the right to develop any Bigfoot Forestry Business, nor can they transfer their development rights to multiple transferees. Consent to a transfer does not waive any claims Bigfoot Forestry may have against the transferor, and the transferee must comply with all terms of the area development agreement. A prospective franchisee in Michigan should carefully consider these conditions and ensure they can meet them before attempting to transfer ownership of their Bigfoot Forestry franchise.