If a sale is involved in the transfer of a Burneys Sweets More franchise, what must the franchisee do?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN AGREEMENT | SUMMARY | |
|---|---|---|---|
| l. | Franchisor's approval of transfer by franchisee | Franchise Agreement § 13(c)(ii), 13(d), 13(e) | Except for limited circumstances, our prior written approval is required for all transfers. The franchise can be terminated for non compliance. We will not unreasonably withhold approval. |
| m. Conditions for Franchisor's approval of transfer | Franchise Agreement § 13(d), 13(e) | You must be in compliance with the Franchise Agreement, refurbish as we require, and execute a general release. Transferee must have a credit rating, moral character, reputation and business qualifications satisfactory to us, and must meet all then current requirements of new franchisees. Transferee must attend and successfully complete our initial training, and execute the Franchise Agreement and collateral agreements in the then-current form, including personal guarantees. If a sale is involved, you must offer us a 45-day right of first refusal and a transfer fee of 50% of the then-current initial franchise fee must be paid. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 41–46)
What This Means (2025 FDD)
According to Burneys Sweets More's 2025 Franchise Disclosure Document, if a sale is involved in the transfer of a franchise, the franchisee must offer Burneys Sweets More a 45-day right of first refusal. Additionally, the franchisee must pay a transfer fee equal to 50% of the then-current initial franchise fee.
This means that if a franchisee decides to sell their Burneys Sweets More franchise to a third party, they must first give Burneys Sweets More the opportunity to purchase the franchise on the same terms. This is known as the right of first refusal. Burneys Sweets More has 45 days to decide whether to exercise this right. If Burneys Sweets More declines, the franchisee can proceed with the sale to the third party, assuming all other transfer requirements are met.
In addition to the right of first refusal, the franchisee must also pay Burneys Sweets More a transfer fee. This fee is equal to 50% of the initial franchise fee that Burneys Sweets More is charging new franchisees at the time of the transfer. This fee is common in franchising and is intended to compensate Burneys Sweets More for its time and expense in reviewing and approving the transfer.
It is important for prospective Burneys Sweets More franchisees to understand these transfer requirements before investing in a franchise. The right of first refusal could delay a potential sale, and the transfer fee could reduce the proceeds from the sale. Franchisees should carefully consider these factors before deciding to sell their franchise.