What are the conditions under which a Byrider franchisee can transfer their franchise (as implied by obligations in Item 9) and how does this relate to the initial franchise fee (Item 5)?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
(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;
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, a franchisee can transfer their franchise under certain conditions. The assignee, or the party to whom the franchise is being transferred, must meet several requirements. Unless the assignee is an immediate family member of the franchisee, they must execute Byrider's current franchise agreement, which may have materially different provisions from the original agreement. However, the assignee is not obligated to pay an initial franchise fee. The term of the new franchise agreement will expire on the date provided in that new agreement.
Additionally, the franchisee and its owners must provide a general release of all claims against Byrider and its affiliates. The assignee, or their designated manager, must satisfactorily complete Byrider's initial training program and pay the current training fee, unless this training is waived by Byrider due to the assignee's prior experience or training. All individuals and entities who will be 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 adversely affect the assignee's operation of the franchise.
These conditions ensure that Byrider maintains control over who operates its franchises and that the new operators are adequately trained and financially stable. While the assignee does not have to pay an initial franchise fee, other fees such as training fees may apply. The initial franchise fee for a new franchisee is $60,000, but this is waived for the assignee in a transfer scenario. This transfer process helps Byrider maintain its brand standards and operational consistency while allowing franchisees a way to exit the business.