Does Body Brain Center have a right of first refusal regarding franchise transfers?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
Agreement, provided that we shall, subsequent to any such assignment, remain liable for the performance of our obligations under this Agreement up to the effective date of the assignment. We may also delegate some or all of our obligations under this Agreement to one or more persons without assigning the Agreement.
- 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
Source: Item 23 — RECEIPT (FDD pages 43–178)
What This Means (2025 FDD)
Based on the 2025 Body Brain Center Franchise Disclosure Document, the agreement specifies conditions under which you, as the franchisee, can transfer your franchise. Body Brain Center does not explicitly state they have a right of first refusal. Instead, Body Brain Center requires prior written approval for any transfer that is not considered a 'Permitted Transfer.' A transfer without their approval is deemed void and constitutes a breach of the agreement.
To gain approval for a transfer, several conditions must be met. The proposed transferee must be of good moral character, possess sufficient business experience, aptitude, and financial resources, and meet Body Brain Center's standards for franchisees. Additionally, you and your owners must be in full compliance with the existing franchise agreement and other agreements with Body Brain Center or its affiliates. The new owners must also complete the initial training program and pay the associated training fee.
Further conditions include obtaining the landlord's consent for lease assignment or securing an approved substitute location, and the transferee must sign Body Brain Center's current franchise agreement. A $3,000 transfer fee is required to cover Body Brain Center's expenses related to the transfer. Finally, you and your owners must sign a general release for all claims arising before the transfer, and you must agree to subordinate the transferee's obligations to your financial obligations to Body Brain Center.