Can Bombs Away Franchising impose conditions on a transfer?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
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- 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that Bombs Away Franchising entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing Bombs Away Franchising at least 60 days prior notice of the proposed Transfer, and without obtaining Bombs Away Franchising's consent. In granting any such consent, Bombs Away Franchising may impose conditions, including, without limitation, the following:
- (i) Bombs Away Franchising receives a transfer fee equal to $7,500 plus any broker fees and other out-of-pocket costs incurred by Bombs Away Franchising;
- (ii) the proposed assignee and its owners have completed Bombs Away Franchising's franchise application processes, meet Bombs Away Franchising's then-applicable standards for new franchisees, and have been approved by Bombs Away Franchising as franchisees;
- (iii) the proposed assignee is not a Competitor;
- (iv) the proposed assignee executes Bombs Away Franchising's then-current form of franchise agreement and any related documents, which form may contain materially different provisions than this Agreement (provided, however, that the proposed assignee will not be required to pay an initial franchise fee);
- (v) all owners of the proposed assignee provide a guaranty in accordance with Section 2.5;
- (vi) Franchisee has paid all monetary obligations to Bombs Away Franchising and its affiliates, and to any lessor, vendor, supplier, or lender to the Business, and Franchisee is not otherwise in default or breach of this Agreement or of any other obligation owed to Bombs Away Franchising or its affiliates;
- (vii) the proposed assignee and its owners and employees undergo such trainin
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away Franchising can impose conditions when a franchisee seeks to transfer their franchise. The document states that franchisee rights and duties are personal, and Bombs Away entered the agreement based on the franchisee's skills and abilities.
Bombs Away requires at least 60 days' prior notice for any proposed transfer and requires their consent. Bombs Away Franchising may impose several conditions when granting consent for a transfer. These conditions include paying a transfer fee of $7,500 plus any broker fees and out-of-pocket costs incurred by Bombs Away Franchising.
Additional conditions include the proposed assignee completing Bombs Away's franchise application process, meeting the standards for new franchisees, and not being a competitor. The assignee must also execute Bombs Away's current franchise agreement, which may have materially different provisions, though they won't have to pay an initial franchise fee. All owners of the proposed assignee must provide a guaranty, and the franchisee must have paid all monetary obligations to Bombs Away and its affiliates and not be in default of any agreements.
Further conditions include the proposed assignee and their owners and employees undergoing required training, and both the franchisee and transferee executing a general release of Bombs Away in a satisfactory form. Finally, the business must fully comply with Bombs Away's most recent System Standards. These stipulations ensure that any transfer maintains the integrity and standards of the Bombs Away franchise system.