Does the Byrider franchise agreement define what constitutes a 'Transfer'?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
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;
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to the 2025 Byrider Franchise Disclosure Document, the franchise agreement outlines specific conditions that constitute a 'Control Assignment,' which effectively defines what Byrider considers a transfer. The agreement states that if the proposed transfer involves the agreement itself, the franchisee's business, a controlling ownership interest in the franchisee, or a series of transfers that collectively result in a controlling ownership change, it is considered a 'Control Assignment.'
For a transfer to be approved by Byrider, the assignee must demonstrate the necessary aptitude, skills, qualifications, credit, and financial resources to operate the business successfully. The franchisee must also be in full compliance with all obligations under the franchise agreement and any other agreements with Byrider, including payment of all monetary obligations, submission of required reports, and adherence to all provisions of the agreements.
Furthermore, neither the assignee nor its owners can have any ownership interest in or perform services for a competitive business. The business location's landlord must also permit the lease transfer to the assignee, with the assignee assuming all obligations under the lease, and the franchisee must not be in default of the lease. These stipulations ensure that Byrider maintains control over who enters the franchise system and that the brand's standards and reputation are upheld, which is a common practice in franchising.
Prospective franchisees should carefully review these conditions to understand the requirements for transferring their Byrider franchise. It is important to note that Byrider retains the right to assess the assignee's qualifications and compliance with the agreement, which could impact the ability to transfer the franchise. Understanding these transfer conditions is crucial for franchisees planning for future exit strategies or changes in ownership.