Under what circumstances can Bigfoot Forestry refuse a transfer of ownership of a franchise?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
bitration or court expenses, expert fees and Travel Expenses incurred by attorneys or expert witnesses to attend proceedings or hearings relating to the matter. Your indemnification obligations survive and remain in full force and effect after the Transfer, termination or expiration of this Agreement.
19. TRANSFERS
19.1. By Us. This Agreement is fully assignable by us (without prior notice to you) and shall inure to the benefit of any assignee(s) or other legal successor(s) to our interest in this Agreement, provided that we shall, subsequent to any such assignment, remain liable for any obligations incurred by us prior to the effective date of the assignment. We may also delegate our obligations under this Agreement to one or more Persons without assigning the Agreement.
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
related contracts (including customer contracts, supplier contracts, warranty work, service guarantees and service plans); and (ii) signs any agreement we require to confirm the foregoing;
(f) the transferee and its owners sign our then-current form of franchise agreement (unless we instruct you to assign this Agreement to the transferee) except that: (i) the Term and renewal term(s) shall be the Term and renewal term(s) remaining under this Agreement unless we specify otherwise; and (ii) the transferee need not pay a separate initial franchise fee;
(g) the transferee agrees to upgrade Technology Systems, operating equipment and tools to conform to our then-current standards and specifications (these changes must be completed within 180 days after the Transfer or such shorter period of time that we specify);
(h) you or the transferee pay us a $10,000 transfer fee to defray expenses we incur in connection with the Transfer (in addition to the transfer fee, you must reimburse us for any commission we pay our broker if our broker finds the transferee);
(i) you and your Owners sign a General Release;
(j) you agree to subordinate the transferee's financial obligations to you to the transferee's financial obligations owed to us pursuant to the franchise agreement (we may require you to enter into a written subordination agreement);
(k) we choose not to exercise our right of first refusal described in §19.5; and
(l) you or the transferring Owner, as applicable, and the transferee satisfy all other conditions we reasonably require as a condition to approval of the Transfer.
Our consent to a Transfer shall not constitute a waiver of any Claims we have against the transferor or our right to demand the transferee comply with all terms of the franchise agreement.
- **19.3.
Source: Item 23 — RECEIPT (FDD pages 42–162)
What This Means (2025 FDD)
According to Bigfoot Forestry's 2025 Franchise Disclosure Document, the rights and duties within the franchise agreement are personal to the franchisee and their owners. Bigfoot Forestry grants franchise rights based on the character, skill, attitude, business ability, and financial resources of the franchisee and their owners. Because the 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 retains at least 20% of the equity interests.
Bigfoot Forestry will not unreasonably withhold approval of a proposed transfer if certain conditions are met. These conditions include believing the proposed transferee has sufficient business experience, aptitude, and financial resources to operate a Bigfoot Forestry Business and meets the 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 the transferee must 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 their broker if the broker found the transferee. The franchisee must assign all Franchise Agreements to the transferee according to the transfer provisions, including paying any transfer fee. Both the franchisee and their owners must sign a General Release. Bigfoot Forestry must also 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 is prohibited from transferring less than all development rights or transferring development rights to multiple transferees. Consent to a transfer does not waive any claims Bigfoot Forestry may have against the transferor or the right to demand compliance from the transferee. Even for a Permitted Transfer, the franchisee must provide at least 10 days' prior notice to Bigfoot Forestry and, if the transfer results in a new Developer Entity, cause the former Developer Entity to sign a corporate guarantee to secure the new entity's financial obligations.