What approval is required from Byrider Franchising Partners before a Byrider franchisee can sell or assign retail installment contracts to an unaffiliated third party?

According to Byrider's 2025 Franchise Disclosure Document, a Byrider franchisee must obtain approval from Byrider Franchising Partners before selling or assigning retail installment contracts to an unaffiliated third party. This approval must be secured prior to each individual sale or assignment. Additionally, the franchisee cannot sell or assign retail installment contracts exceeding 20% of the Gross Sales (Byrider Vehicle Sales) during any calendar month. For the purposes of this restriction, Gross Sales is calculated using a 12-month rolling monthly average.

This requirement means that Byrider retains control over who franchisees can sell their retail installment contracts to, ensuring that these third parties meet Byrider's standards. This approval process aims to protect the Byrider brand and maintain the quality of financial transactions associated with the franchise. The 20% limit on contract values ensures that franchisees do not excessively rely on third-party sales, which could potentially undermine the financial stability of the franchise or the integrity of Byrider's financial system.

For a prospective franchisee, this means they need to factor in the time and effort required to obtain Byrider Franchising Partners' approval for each unaffiliated third party they intend to sell or assign contracts to. They also need to carefully monitor their sales and assignments to ensure they remain within the 20% threshold. Failure to comply with these requirements could result in penalties or other enforcement actions from Byrider Franchising Partners. It is important for franchisees to understand the approval criteria Byrider Franchising Partners uses for third parties, even though this criteria is not explicitly provided to franchisees, to facilitate smoother transactions.

Furthermore, the FDD states that Byrider will not unreasonably withhold approval. This provides some assurance to franchisees that legitimate sales will not be blocked without valid reasons. However, franchisees should still be prepared to justify their choice of third parties and provide any necessary documentation to support their request for approval. Understanding these conditions is crucial for managing the financial aspects of the Byrider franchise effectively and maintaining a good relationship with the franchisor.