Does Bombs Away Franchising have to provide a reason for denying a transfer?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
Bombs Away Franchising.** Bombs Away Franchising may transfer or assign this Agreement, or any of its rights or obligations under this Agreement, to any person or entity, and Bombs Away Franchising may undergo a change in ownership and/or control, without the consent of Franchisee.
- 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
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 does not explicitly state that they must provide a reason for denying a transfer. However, the document does outline conditions under which Bombs Away Franchising may impose conditions or deny a transfer.
The FDD states that Bombs Away Franchising may impose conditions when granting consent for a transfer. These conditions include receiving a transfer fee of $7,500 plus broker fees, ensuring the proposed assignee meets the standards for new franchisees and is not a competitor, and that the assignee executes Bombs Away Franchising's current franchise agreement. The agreement also stipulates that the franchisee must have paid all monetary obligations and not be in default of any agreements.
While Bombs Away Franchising retains significant control over transfer approvals, the FDD does not explicitly require them to provide a specific reason for denial. It is important for a prospective franchisee to discuss transfer conditions and potential denial reasons with Bombs Away Franchising to fully understand the transfer process and potential limitations.