What is the process for a Burros Fries franchisee to transfer or assign the franchise agreement?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
le, performance of the Franchise, etc.). Franchisee expressly consents to any such discussions by us and we may contact any proposed transferee directly regarding such matters or otherwise;
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- Neither Franchisee nor any transferee shall rely on us to assist in the evaluation of the terms of any proposed transfer. Franchisee acknowledges and agrees that an approval of a proposed transfer shall not be deemed to be an approval of the terms, nor anyindication as to any likelihood of success or economic viability;
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- Franchisee and its Owners and/or Principals will agree not to compete, not to divert business, or attempt to hire employees, after the transfer in accordance with restrictions acceptable to us and substantially similar to those described in Section 19.C of this Agreement; and
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- Franchisee and its Owners and/or Principals will not directly or indirectly at any time or in any manner (except with respect to other Burros & Fries Business that Franchisee or its Principals own and operate) identify itself or any business as a current or former Burros & Fries business owner or as one of our franchise owners; use any Mark, any colorable imitation of a Mark, or other indicia of a Burros & Fries Business in any manner or for any purpose; or utilize for any purpose any trade name, trade or service mark or other commercial symbol that suggest or indicates a connection or association with us as described in Sections 24.A and 24.C of this Agreement.
In addition, the Franchisee must submit copies of the draft Asset Purchase Agreement or Ownership Purchase Agreement, all draft Promissory Notes, and Security Agreements, with the transferee, regardless of whether they are Franchisee financed or lender financed. In addition to all other grounds for rejection, we have the right to reject any proposed purchase of the assets of the Franchised Business or any type of ownership interest in the Franchisee or Franchised Business on the grounds that the proposed transferee has, in our sole opinion, taken on too much debt.
C.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, if a franchisee wishes to transfer their franchise, neither the franchisee nor the transferee should rely on Burros Fries to assist in evaluating the terms of the proposed transfer. Burros Fries's approval of a transfer does not indicate approval of the terms or guarantee the success or economic viability of the transfer.
As part of the transfer agreement, the franchisee, along with their owners and principals, must agree not to compete with Burros Fries, divert business, or attempt to hire employees after the transfer. These restrictions must be acceptable to Burros Fries and substantially similar to those outlined in Section 19.C of the Franchise Agreement. Furthermore, the franchisee and their associates cannot identify themselves as current or former Burros Fries business owners or use any of Burros Fries's trademarks or trade names, except concerning other Burros & Fries businesses they may own and operate.
The franchisee is required to submit copies of the draft Asset Purchase Agreement or Ownership Purchase Agreement, including all draft Promissory Notes and Security Agreements, with the transferee, regardless of financing. Burros Fries retains the right to reject any proposed purchase if they believe the proposed transferee has taken on too much debt. Burros Fries also has an unrestricted right to sell, transfer, or assign its rights and obligations under the Franchise Agreement to any transferee or legal successor.