Does the definition of 'Transfer' for a Buildingstars franchise include a change of control or management of the Business?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- M. "Transfer" means and includes any voluntary or involuntary, direct or indirect, assignment, sale, gift conveyance, or other disposition of an Interest including without limitation: (a) transfer of any capital stock, partnership interest, limited liability interest or other ownership Interest of FRANCHISEE or its owners; (b) merger, consolidation or issuance of additional stock or ownership interests; (c) transfer in bankruptcy or dissolution of marriage or otherwise by operation of law or by order of court; (d) transfer to a personal representative upon disability or transfer upon the death of a majority owner; (e) the grant or creation of any lien or encumbrance (f) any sale, lease, sublease, or other transfer or disposition of any of the assets used in the performance of the Business, whether now owned or hereafter acquired, except in the normal and ordinary course of business; or (g) any change of control or management of the Business.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the definition of "Transfer" includes a change of control or management of the Business. This definition is broad, covering both voluntary and involuntary transfers, whether direct or indirect.
For a prospective Buildingstars franchisee, this means that any action that results in a shift in who controls or manages the business is considered a transfer. This could include selling the business, gifting it, or even changes in the ownership structure, such as issuing additional stock. It also extends to events like bankruptcy, divorce, or the death of a majority owner.
Buildingstars maintains the right to approve any transfer, ensuring that the new controlling party meets their standards for new franchisees. This protects the integrity of the Buildingstars brand and system. Understanding this broad definition is crucial for franchisees, as any action falling under it requires franchisor approval and may trigger transfer fees or other requirements.