What constitutes a 'Change of Control' in the Bor Restoration Franchise Agreement?

According to Bor Restoration's 2024 Franchise Disclosure Document, a 'Change of Control' has specific implications for the franchise agreement. It is important to understand these conditions, as a change of control may require franchisor approval and could potentially impact the franchisee's rights and obligations.

Specifically, a 'Change of Control' occurs under the following conditions: (i) if a natural person franchisee takes on any partner; (ii) if a natural person franchisee converts to a business entity and then transfers more than 49% of the equity interest to another person or persons; (iii) if a business entity franchisee takes on any number of equity partners and delivers 49% or more of the equity interest to such persons; (iv) through the transfer of equity interests equaling 49% or more to a person other than the franchisee; (v) by a transfer of any equity interest to a voting agreement, voting trust, or the like; or (vi) if the franchisee in any manner delivers control of the day-to-day operations of the business to a person who the franchisor has not first approved.

These stipulations are fairly typical in franchise agreements, as franchisors want to maintain control over who is operating their branded businesses. The Bor Restoration franchise agreement is structured to ensure that the franchisor retains the right to approve significant changes in ownership or management, safeguarding the brand's standards and reputation. A prospective franchisee should carefully consider these conditions and discuss any potential future changes in ownership or management with Bor Restoration to ensure compliance with the franchise agreement.