What conditions trigger the need for Buff City Soap's approval of a transfer by the franchisee?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
Accordingly, no Transfer is permitted or authorized without Franchisor's prior written approval, subject to the conditions below.
Notwithstanding the foregoing, Franchisee's Principals may transfer an interest in Franchisee to another Principal or to one of Franchisee's Affiliates, provided that (i) no such transfer may result in a change in Control of Franchisee or a change in the Principal that holds a Controlling Interest in Franchisee, and (ii) Franchisee provides prior written notice to Franchisor.
- (c) Conditions for Approval of Transfer.
If the proposed Transfer by Franchisee is of this Agreement, Control of Franchisee or substantially all of Franchisee's assets, or is one of a series of Transfers (regardless of the time period over which such Transfers occur) which in the aggregate constitute the Transfer of this Agreement or Control of Franchisee, and if Franchisor has not exercised its right of first refusal under Section 18(f), Franchisor will approve a Transfer only if the conditions set forth in this Section 18(c), as may be amended by Franchisor from time to time, are met prior to or concurrently with the proposed effective date of the Transfer:
(1) Franchisee (and its Principals, if Franchisee is not publicly traded) has paid all Royalty Fees and all other amounts owed to Franchisor and its Affiliates, submitted all required Reports and other statements and data and otherwise are in full compliance with this Agreement as of the date of Franchisee's request for approval of the Transfer and as of effective date of the Transfer.
(2) The proposed transferee (and its direct and indirect owners): (A) have sufficient business experience, aptitude, assets and financial resources to operate the Makery; (B) are individuals of good character and otherwise meet Franchisor's then-applicable Standards for Makery franchisees; (C) are not engaged and will not engage in the operation or ownership of a Competitive Business, and the proposed transferee will engage only in the operation of the Makery; and (D) will cooperate with reasonable due diligence requests made by Franchisor promptly thereafter and if additional time is reasonably needed, then prior to the proposed effective date of the Transfer.
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, a franchisee needs prior written approval from Buff City Soap for any transfer of the franchise agreement, control of the franchisee, or substantially all of the franchisee's assets. This requirement also applies to a series of transfers that, in aggregate, constitute a transfer of the agreement or control.
However, transfers of interest in the franchise to another principal or affiliate of the franchisee do not require approval as long as the transfer does not result in a change of control or a change in the principal holding a controlling interest. In such cases, the franchisee must provide prior written notice to Buff City Soap.
If Buff City Soap does not exercise its right of first refusal, it will only approve a transfer if certain conditions are met. These conditions include the franchisee being current on all payments and in full compliance with the franchise agreement. Additionally, the proposed transferee must demonstrate sufficient business experience, financial resources, and good character, and must not be involved in any competitive business. The transferee must also cooperate with Buff City Soap's due diligence requests.