Does the definition of 'Transfer' for a Buildingstars franchise include involuntary transfers?
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' 2025 Franchise Disclosure Document, the definition of "Transfer" includes both voluntary and involuntary transfers. This is important for prospective franchisees to understand because any change in ownership or control of the franchise, whether intended or not, falls under the transfer provisions of the franchise agreement.
The definition of "Transfer" is broad, encompassing various scenarios such as the sale, assignment, or gift of the franchise interest. It also includes events like mergers, consolidations, the issuance of additional stock, and transfers occurring due to bankruptcy, dissolution of marriage, or by order of a court. Furthermore, the definition extends to transfers to a personal representative upon disability or death of a majority owner, the creation of any lien or encumbrance, and any change of control or management of the business.
This comprehensive definition means that franchisees need to be aware of the implications of any action that could be construed as a transfer, as it may trigger certain requirements or restrictions outlined in the franchise agreement. For instance, Buildingstars' approval may be required, and transfer fees may apply. Understanding this definition is crucial for franchisees to ensure they remain in compliance with the franchise agreement and avoid any unintended consequences.