What is considered a 'Permitted Transfer' of a Body Brain Center franchise, and how does it differ from other transfers?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
"Owner" or "Owners" means any individual who owns a direct or indirect ownership interest in the franchise or the Entity that is the franchisee under this Agreement. "Owner" includes both passive and active owners.
"Permitted Transfer" means: (i) a Transfer from one Owner to another Owner who was an approved Owner prior to such Transfer; and/or (ii) a Transfer to a newly established Entity for which the approved Owners collectively own and control 100% of the ownership interests and voting power.
19.2 By You.
You understand that the rights and duties created by this Agreement are personal to you and the Owners and that we have granted the franchise in reliance upon the individual or collective character, skill, aptitude, attitude, business ability and financial capacity of you and your Owners.
Therefore, neither you nor any Owner may engage in any Transfer other than a Permitted Transfer without our prior written approval.
Any Transfer (other than a Permitted Transfer) without our approval shall be void and constitute a breach of this Agreement.
We will not unreasonably withhold our approval of any proposed Transfer, provided that the following conditions are all satisfied:
(i) the proposed transferee is, in our opinion, an individual of good moral character, who has sufficient business experience, aptitude and financial resources to own and operate a Body & Brain Center and otherwise meets all of our then applicable standards for franchisees;
(ii) you and your Owners are in full compliance with the terms of this Agreement and all other agreements with us or our affiliate;
(iii) all of the owners of the transferee have successfully completed or made arrangements to attend the initial training program (and the transferee has paid us the initial training fee for each new owner and manager who attends training);
(iv) your landlord consents to your assignment of the lease to the transferee, or the transferee is diligently pursuing an approved substitute location within the Site Selection Area;
(v) the transferee and its owners sign our then current form of franchise agreement, except that: (a) the Term and renewal term(s) shall be the Term and renewal term(s) remaining under this Agreement; and (b) the transferee need not pay a separate initial franchise fee;
(vi) you or the transferee pay us a $3,000 transfer fee to defray expenses that we incur in connection with the Transfer;
(vii) you and your Owners sign a General Release for all claims arising before or contemporaneously with the Transfer;
(viii) you enter into an agreement with us to subordinate the transferee's obligations to you to the transferee's financial obligations owed to us pursuant to the franchise agreement;
Source: Item 23 — RECEIPT (FDD pages 43–178)
What This Means (2025 FDD)
According to Body Brain Center's 2025 Franchise Disclosure Document, a 'Permitted Transfer' is specifically defined as (i) a transfer from one owner to another owner who was already an approved owner, or (ii) a transfer to a newly established entity where the approved owners collectively own and control 100% of the ownership interests and voting power. This definition provides clarity on what types of ownership changes Body Brain Center will automatically approve.
Any transfer that does not meet the definition of a 'Permitted Transfer' requires Body Brain Center's prior written approval. Transferring a franchise without approval constitutes a breach of the franchise agreement and is considered void. This requirement underscores Body Brain Center's interest in maintaining control over who operates its franchises and ensures that new operators meet their standards.
For a regular transfer requiring approval, the proposed transferee must be of good moral character, possess sufficient business experience and financial resources, and meet all of Body Brain Center's then-applicable standards for franchisees. The franchisee must also be in full compliance with all agreements, and the new owners must complete the initial training program. Additionally, the landlord must consent to the lease assignment, and the transferee must sign the current franchise agreement (with some modifications related to the term and initial franchise fee). A $3,000 transfer fee is required, and both the transferring franchisee and its owners must sign a general release for all claims. Finally, the transferring franchisee must agree to subordinate the transferee's obligations to them to the transferee's financial obligations to Body Brain Center.