What is the significance of the Seller Franchise Agreement in the transfer of a Burneys Sweets More franchise?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
lease of Guaranty. The Seller Franchise Agreement provides that the Transfer cannot take place without the consent of Franchisor. Franchisor will consent to the Transfer, as provided in the Seller Franchise Agreement, and will release (a) Seller from any obligations arising under the Seller Franchise Agreement and (b) Seller Guarantors under any guaranty agreement (in each case except as described below) from and after the Effective Date; provided, however, such consent and release are expressly contingent upon compliance with the following terms and conditions on or before the date of the closing of the Transfer ("Closing"):
- a. Franchise Agreement. The Seller Franchise Agreement will terminate as of the Closing, and the operation of the Franchised Location will thereafter be governed by the Buyer Franchise Agreement;
- b. Payment of Amounts Due. Seller will pay all amounts due and owing to Franchisor through the date of Closing; including but not limited to past due royalty and advertising fees in the amount of $_________________;
- c. Transfer Fee. Seller shall pay a transfer fee of $_________________ as provided in the Seller Franchise Agreement;
- d. Financial Statements. Seller will provide Franchisor with all required monthly financial statements for the Franchised Location through the date of Closing;
- e. Training. Buyer or Buyer's designated representative(s) shall have satisfactorily completed the initial training program as described in the Buyer Franchise Agreement prior to the Closing;
- f. Right to Possession. Buyer will provide satisfactory evidence to Franchisor that Buyer has the right to possession of the premises for the Franchised Location by way of lease assignment (with all required landlord consents) or otherwise;
- g. Site Selection Assistance. Buyer acknowledges and agrees that Franchisor has satisfied any and all obligations under the Buyer Franchise Agreement with respect to site selection and development assistance;
- h. Remodeling. Seller and Buyer shall ensure that all of the items reflected on the Pre-Sale Inspection which is attached hereto have been completed;
- i. Purchase Agreement. The Purchase Agreement will not be amended and the terms of the transaction thereunder will not be changed except with the prior written consent of Franchisor;
- j. Buyer Loans.
Source: Item 23 — RECEIPT (FDD pages 50–199)
What This Means (2025 FDD)
According to the 2025 Burneys Sweets More Franchise Disclosure Document, the Seller Franchise Agreement is central to the transfer of a franchise to a new buyer. The transfer of a Burneys Sweets More franchise cannot occur without the franchisor's consent, as stipulated in the Seller Franchise Agreement.
The franchisor's consent to the transfer is conditional and depends on several factors. First, the Seller Franchise Agreement will terminate as of the closing date of the transfer, and the new buyer's franchise operations will be governed by a new Buyer Franchise Agreement. Second, the seller must pay all outstanding amounts owed to Burneys Sweets More through the closing date, including any past due royalty and advertising fees. Third, the seller is responsible for paying a transfer fee as outlined in the Seller Franchise Agreement, though the specific amount is not provided in this document. The seller must also provide all required monthly financial statements for the franchise location up to the closing date. Finally, the buyer, or their representative, must complete the initial training program described in the Buyer Franchise Agreement before the transfer can be finalized.
Upon completion of the transfer, Burneys Sweets More will release the seller from obligations arising under the Seller Franchise Agreement and release the Seller Guarantors from any guaranty agreement, with specific exceptions. These exceptions include any monetary obligations owed to Burneys Sweets More prior to the closing date and any provisions of the Seller Franchise Agreement that survive termination, such as post-termination restrictive covenants, audit rights, dispute resolution and notice, and confidentiality provisions. Both the buyer and seller must also agree to execute any additional documents necessary to complete the transfer as outlined in the Purchase Agreement, the Seller Franchise Agreement, and the Buyer Franchise Agreement.