Must a proposed assignee meet Bombs Away Franchising's standards for new franchisees?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
y 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 Franchi
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, if a franchisee wishes to transfer their franchise to another party, the proposed assignee must meet Bombs Away's standards for new franchisees. Specifically, the proposed assignee and their owners must complete Bombs Away's franchise application processes and be approved by Bombs Away as franchisees.
This requirement ensures that any new operator of a Bombs Away franchise meets the brand's standards for business skill, financial capacity, personal character, experience, and business ability, as Bombs Away relies on these qualities when entering into a franchise agreement. This is a common practice in franchising, as franchisors want to maintain consistent quality and brand standards across all locations.
In addition to meeting the standards for new franchisees, the proposed assignee must also fulfill other conditions. These include paying a transfer fee of $7,500 plus any broker fees and out-of-pocket costs incurred by Bombs Away, not being a competitor, executing Bombs Away's current form of franchise agreement, providing a guaranty, and ensuring all financial obligations to Bombs Away and other related parties are met. These conditions collectively protect Bombs Away's interests and ensure a smooth transition of ownership.