Can Burros Fries reject a proposed sale of a Burros Fries franchise?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, Burros Fries has the right to reject a proposed purchase of a franchise. Specifically, Burros Fries can reject the purchase of assets or any ownership interest in the franchise business.
Burros Fries can reject a proposed purchase if, in their opinion, the proposed buyer has taken on too much debt. This clause protects Burros Fries from having a franchisee who may be at higher risk of failing due to financial instability.
In addition to submitting required documents, a franchisee looking to sell their Burros Fries business should ensure the potential buyer's debt level is reasonable to avoid rejection by Burros Fries.