What subjective and objective standards are used to evaluate a Burros Fries franchise transferee?

Based on the 2024 Burros Fries Franchise Disclosure Document, the franchisor has 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 if the proposed transferee has, in their sole opinion, taken on too much debt. This indicates a subjective standard based on the franchisor's opinion of the transferee's debt level.

Additionally, 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. This requirement allows Burros Fries to review the financial details of the transfer agreement.

Burros Fries approval of a proposed transfer does not indicate any likelihood of success or economic viability for the transferee. The franchisee and its owners/principals must also agree not to compete, divert business, or attempt to hire employees after the transfer, adhering to restrictions similar to those in Section 19.C of the Franchise Agreement. They must also not identify themselves as a current or former Burros & Fries business owner or use any marks or indicia of a Burros & Fries Business, as described in Sections 24.A and 24.C of the Agreement.