In the event of the death or incapacity of the Bombs Away franchisee, who is responsible for transferring the business?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.4 Transfer upon Death or Incapacity. Upon the death or incapacity of Franchisee (or, if Franchisee is an entity, the Owner with the largest ownership interest in Franchisee), the executor, administrator, or personal representative of that person must Transfer the Business to a third party approved by Bombs Away Franchising (or to another person who was an Owner at the time of death or incapacity of the largest Owner) within nine months after death or incapacity. Such transfer must comply with Section 15.2.
- 15.5 Bombs Away Franchising's Right of First Refusal. Before Franchisee (or any Owner) engages in a Transfer (except under Section 15.3, or to a co-Owner, or to a spouse, sibling, or child of an Owner), Bombs Away Franchising will have a right of first refusal, as set forth in this Section. Franchisee (or its Owners) shall provide to Bombs Away Franchising a copy of the terms and conditions of any Transfer. For a period of 30 days from the date of Bombs Away Franchising's receipt of such copy, Bombs Away Franchising will have the right, exercisable by notice to Franchisee, to purchase the assets subject of the proposed Transfer for the same price and on the same terms and conditions(except that Bombs Away Franchising may substitute cash for any other form of payment). If Bombs Away Franchising does not exercise its right of first refusal, Franchisee may proceed with the Transfer, subject to the other terms and conditions of this Article.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, in the event of the death or incapacity of the franchisee, the responsibility of transferring the Bombs Away business falls upon the executor, administrator, or personal representative of the deceased or incapacitated franchisee. If the franchisee is an entity, this responsibility extends to the owner with the largest ownership interest in the franchisee.
The executor, administrator, or personal representative must transfer the Bombs Away business to a third party approved by Bombs Away Franchising within nine months of the death or incapacity. Alternatively, the business can be transferred to another person who was an owner at the time of death or incapacity of the largest owner. This transfer is subject to compliance with the standard transfer conditions outlined in Section 15.2 of the franchise agreement.
Before any transfer occurs (except under specific conditions like transfers for convenience of ownership, to a co-owner, or to a spouse, sibling, or child of an owner), Bombs Away Franchising retains a right of first refusal. The franchisee must provide Bombs Away Franchising with a copy of the terms and conditions of the proposed transfer. Bombs Away Franchising then has 30 days to exercise its right to purchase the assets under the same terms, with the option to substitute cash for other forms of payment. If Bombs Away Franchising waives this right, the franchisee can proceed with the transfer, adhering to all other terms and conditions of the franchise agreement.