Does the Buns On Fire franchisor have approval rights over franchisee transfers?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
| k. "Transfer" by franchisee— defined | XX | Includes transfer of contract, of assets or any ownership change. |
|---|---|---|
| 1. Franchisor approval of | XX | We have the right to approval all transfers. |
| transfer by franchisee | ||
| m. Conditions for franchisor approval of transfer | XX | Transferee qualifies, all amounts due are paid in full, you sign a general release in our favor, transferee completes training, transfer fee paid, then-current contract signed |
| n. Franchisor's right of first refusal | XX | We can match any offer. |
| to acquire franchisee's business | ||
| o. Franchisor's option to purchase | XX | We can buy the business on termination or |
| franchisee's business | non-renewal for the price offered to you. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 41–43)
What This Means (2025 FDD)
According to Buns On Fire's 2025 Franchise Disclosure Document, the franchisor retains the right to approve all franchisee transfers. This is a common practice in franchising, as it allows the franchisor to maintain control over who operates a Buns On Fire location and ensures that any new franchisee meets their standards.
For a prospective Buns On Fire franchisee, this means that if they decide to sell their franchise, they cannot simply transfer it to anyone. They must obtain approval from Buns On Fire. The FDD outlines conditions for approval, including that the transferee must qualify, all outstanding amounts must be paid, a general release must be signed in favor of Buns On Fire, the transferee must complete training, a transfer fee must be paid, and the then-current contract must be signed.
Additionally, Buns On Fire has the right of first refusal, meaning they can match any offer made by a potential buyer. They also have the option to purchase the business upon termination or non-renewal for the price offered to the franchisee. These provisions give Buns On Fire significant control over the transfer process and the future of the franchise location. Franchisees should carefully consider these conditions before entering into a franchise agreement with Buns On Fire.