Does the Byrider definition of 'Transfer' include both voluntary and involuntary dispositions?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
An assignment, sale, gift, or other disposition includes the following events:
(1) merger or consolidation or issuance of additional securities or other forms of ownership interest;
(2) any sale of a security convertible to an ownership interest;
(3) transfer of an interest in the Franchisee or the Franchisee's owners, this Agreement, the Franchisee's Business or substantially all of its assets, or the right to occupy the Business Location in a divorce, insolvency, or entity dissolution proceeding or otherwise by operation of law;
(4) if the Franchisee, one of the Franchisee's owners or an owner of one of the Franchisee's owners dies (if natural persons), a transfer of an interest in the Franchisee, this Agreement, the Franchisee's Business or substantially all of its assets, the right to occupy the Business Location or the Franchisee's owner by will, declaration of or transfer in trust, or under the laws of intestate succession; or
(5) pledge of this Agreement (to someone other than the Company) or an ownership interest in the Company or its owners as security, foreclosure upon the Franchisee's Business, or the Franchisee's transfer, surrender, or loss of the possession, control, or management of the Franchisee's Business; provided that Franchisee may pledge the assets of the Franchisee's Business to a lender in connection with obtaining financing for the Franchisee's Business.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the definition of 'transfer' includes both voluntary and involuntary dispositions. The FDD specifies that an assignment, sale, gift, or other disposition is considered a transfer. This broad definition encompasses various scenarios, including those that are not initiated by the franchisee.
Specifically, the Byrider FDD lists several events that fall under the umbrella of 'transfer,' including scenarios arising from divorce, insolvency, entity dissolution, or other legal processes. These are examples of involuntary transfers, where the franchisee's interest in the business changes hands due to external circumstances or legal requirements. The definition also covers situations where the franchisee, or an owner, dies, resulting in a transfer of interest through a will, trust, or intestate succession, which are also involuntary.
Furthermore, the definition includes events like foreclosure upon the franchisee's business or the loss of possession, control, or management of the business. These situations can arise from financial distress or other factors outside the franchisee's direct control, making them involuntary transfers as well. However, the franchisee is allowed to pledge business assets to a lender for financing purposes without this being considered a transfer, provided the pledge is made to a lender in connection with obtaining financing for the Byrider business.
In summary, the Byrider franchise agreement considers a wide range of events as 'transfers,' including both those initiated voluntarily by the franchisee and those occurring involuntarily due to legal, financial, or personal circumstances. This comprehensive definition ensures that Byrider maintains control over who operates its franchises and under what conditions.