What is the Company's obligation if the Byrider franchisee and its owners are in full compliance with the franchise agreement?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
subject to the provisions of this Section 14, the Company will approve a transfer that meets all of the requirements of this Section 14.3.C. A non-controlling (less than 50%) ownership interest in the Franchisee (or its owners), as determined as of the date on which the proposed transfer will occur, may be transferred if the proposed transferee and its direct and indirect owners (if the transferee is a legal entity) are of good character and meet the Company's then applicable standards for franchisees. All proposed transferees must fill out and submit to the Company its then current form of franchise application. If the proposed transfer is of this Agreement, the Franchisee's Business or a controlling ownership interest in the Franchisee or one of its owners, or is one of a series of transfers (regardless of time period over which these transfers take place) which in the aggregate transfer this Agreement or a controlling ownership interest in the
Franchisee (or one of its owners) (each, a "Control Assignment"), then all of the following conditions must be met before or concurrently with the effective date of the transfer:
(1) The purchaser, transferee, lessee or assignee (the "Assignee") (or the principal officers, shareholders, members, or directors of the Assignee in the case where the Assignee is a legal entity) has the aptitude, skills, qualifications, credit and financial resources necessary, in the Company's judgment, to conduct the Franchisee's Business and to fulfill the Assignee's obligations to the Company;
(2) As of the date of any such Control Assignment, the Franchisee shall have fully complied with all its obligations hereunder or under any other agreement with the Company, including, without limitation, (i) paying all monetary obligations owed to the Company, its affiliates, and any third party vendors, (ii) submitting all required reports and statements, and (iii) complying with all provisions of this Agreement or any other agreement with the Company or its affiliates during both the sixty (60) day period before the Franchisee requested the Company's consent and the period between the Franchisee's request for consent and the effective date of the Assignment;
(3) Neither the Assignee nor its owners (if the Assignee is a legal entity) or affiliates have an ownership interest (direct or indirect) in or perform services for a Competitive Business (defined in Section 18.1);
(4) The Business Location's landlord, if any, allows the Franchisee to transfer the Business Location's lease to Assignee, Assignee assumes all of the obligations of the Franchisee under the lease for the Business Location and the Franchisee is not in default with respect to any of its obligations under said lease;
(5) Unless the Assignee is an immediate family member of Franchisee (or the transferring owner), the Assignee executes the Company's then-current form of franchise agreement and related documents, any and all of the provisions of which may differ materially from any and all of those contained in this Agreement; provided that the Assignee shall not be obligated to pay an Initial Franchise Fee; provided further that the term of the new franchise agreement shall expire on the date provided in such new franchise agreement;
(6) The Franchisee and its owners execute and deliver to the Company a general release of all claims against the Company, its shareholders, officers, directors, employees, and agents;
(7) The Assignee, or Designated Manager designated by the Assignee, shall have satisfactorily completed the Initial Training Program then required of all new franchisees of the Company, and paid the then-current training fee being charged by the Company in connection with all such transfers, unless such training is waived by the Company, in writing, because of the Assignee's prior experience or training;
(8) All individuals and entities who will be direct or indirect owners must execute or have executed a guaranty in a form the Company prescribes;
(9) The Company has determined that the purchase price and payment terms will not adversely affect the Assignee's operation of the Franchisee's Business;
(10) If the Franchisee or any of its owners finance any part of the purchase price, the Franchisee and/or its owners agree that all of the Assignee's obligations under promissory notes, agreements or security interests reserved in the Franchisee's Business are subordinate to the Assignee's obligations to pay any amounts due to the Company, its affiliates, and third-party vendors and otherwise to comply with this Agreement;
(11) (a) Franchisee has corrected any existing deficiencies of the Business Location of which the Company has notified Franchisee on a punch list or in other communications, and/or (b) the Assignee agrees (if the Control Assignment is of this Agreement) to upgrade, remodel, and refurbish the Business Location in accordance with the Company's thencurrent requirements and specifications for Businesses within the time period the Company specifies following the effective date of the Control Assignment; provided the Company will advise the Assignee before the effective date of the Control Assignment of the specific actions that it must take and the time period within which such actions must be taken;
(12) The Franchisee shall provide the Company with such information as the Company shall require to make such evaluations of the proposed Assignee as it shall deem necessary to satisfy its requirements;
(13) The Franchisee has first offered to sell, transfer, lease or assign this Agreement and the Franchisee's Business to the Company in accordance with Article XV; unless the Assignee is an immediate family member of Franchisee (or an approved existing owner of the franchise);
(14) The Franchisee and its transferring owners will not directly or indirectly at any time or in any manner (except with respect to other Businesses the Franchisee owns and operates) identify itself or themselves or any business as a current or former Business or as one of the Company's franchise owners; use any Mark, any colorable imitation of a Mark, or other indicia of a Business in any manner or for any purpose;
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
Based on the 2025 Byrider Franchise Disclosure Document, if a franchisee is in full compliance with the franchise agreement and seeks to transfer the agreement, business, or a controlling ownership interest, several conditions must be met. The assignee must demonstrate the necessary aptitude, skills, qualifications, credit, and financial resources to manage the Byrider business and fulfill the obligations to Byrider. The franchisee must have fully complied with all obligations, including monetary obligations, report submissions, and adherence to the agreement terms, both 60 days before requesting consent and throughout the transfer process. Neither the assignee, its owners, nor affiliates can have an ownership interest in or perform services for a competitive business. Additionally, the business location's landlord must permit the lease transfer to the assignee, with the assignee assuming all lease obligations and the franchisee not being in default.
Furthermore, the assignee, unless an immediate family member, must execute Byrider's current franchise agreement, which may differ materially from the original agreement, although the initial franchise fee is waived. The franchisee and its owners must provide a general release of all claims against Byrider and related parties. The assignee or a designated manager must complete the initial training program and pay the associated fee, unless waived by Byrider due to prior experience or training. All direct or indirect owners must execute a guaranty in a form prescribed by Byrider. Byrider must also determine that the purchase price and payment terms will not negatively impact the assignee's operation of the franchise. If the franchisee finances any part of the purchase, these obligations must be subordinate to the assignee's obligations to Byrider.
If the franchisee meets the qualifications and conditions for a successor franchise, Byrider agrees that if it is still licensing new franchises for Byrider businesses, the franchisee has the right to obtain unlimited successive five-year renewal terms. The franchisee must execute the then-current franchise agreement and other forms required of new franchisees, which may contain materially different rights and obligations, except for the initial franchise fee. The franchisee must also deliver a written general release of all claims against Byrider, its officers, directors, representatives, and affiliates, with certain rights mandated by state law and indemnification obligations remaining in force for two years after the agreement's expiration. Additionally, the franchisee must have settled, resolved, or be actively defending all pending claims and demands against it by any governmental agency or authority. Byrider must notify the franchisee of any necessary modifications within 90 days after receiving the Successor Franchise Notice.