If a Bombs Away franchisee owes money to a lender, can they transfer the franchise?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (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;
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, a franchisee's ability to transfer the franchise when they owe money to a lender is conditional. Bombs Away requires that before a franchisee can transfer the franchise, they must have paid all monetary obligations to Bombs Away and its affiliates, as well as to any lessor, vendor, supplier, or lender to the business.
This means that if a Bombs Away franchisee has outstanding debts to a lender, they must settle these debts before Bombs Away will approve the transfer of the franchise. This condition protects Bombs Away and any potential new franchisees from inheriting financial liabilities or disputes.
This requirement is fairly standard in franchising, as franchisors typically want to ensure that franchisees are in good financial standing before a transfer occurs. A prospective Bombs Away franchisee should be aware of this requirement and factor it into their plans if they anticipate needing to transfer the franchise in the future.