Can Byrider freely assign or transfer the Franchise Agreement to a third party?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
ils the second consecutive Compliance Audit, Franchisee shall pay to Company a penalty in the amount of $2,500.00 plus reimbursement of travel, food, and lodging for a third consecutive Compliance Audit. If Franchisee fails the third consecutive Compliance Audit, Franchisee shall pay to Company a penalty in the amount of $10,000.00 and the Company shall have the right to terminate this Agreement pursuant to Section 16.2.
ARTICLE XIV
TRANSFER OF FRANCHISE
14.1 Assignment by the Company. The Franchisee acknowledges that the Company maintains a staff to manage and operate the System and that staff members can change as employees come and go. The Franchisee further acknowledges that it did not sign this Agreement in reliance on the continued participation by or employment of any of the Company's shareholders, directors, officers, or employees. The Company shall have the right to change its ownership or form and/or assign or transfer this Agreement, all of its rights, obligations and privileges under this Agreement, and any other agreement to a third party without restriction. After the Company's assignment of this Agreement to a third party who expressly assumes all of the obligations of the Company under this Agreement, the Company will no longer have any performance or other obligations under this Agreement. This Agreement and any other agreement will inure to the benefit of any transferee or other legal successor to the Company's interest in it.
14.2 Assignment by Franchisee to a Wholly-Owned Corporation or Limited Liability Company or Other Business Entity. Notwithstanding anything contained herein to the contrary, including, without limitation, Section 14.3 below, subject to the Company's prior written consent, which will not be unreasonably withheld, if the Franchisee is a natural person and is in full compliance with this Agreement, he may assign and transfer the rights hereunder to a corporation, limited liability company, or other similar business entity (hereinafter, the "Entity") in which the Franchisee (a) is the owner of the controlling ownership interests of the Entity and (b) is the principal executive officer of the Entity, as long as: (i) the Entity owns all of the assets of the Franchisee's Business; (ii) the Entity's activities are confined exclusively to operating the Franchisee's Business; and (iii) the other owners of the Entity's ownership interests would not be in violation of the covenants not to compete set forth in Section 18.1. Such transfer will not be subject to payment of a transfer fee. The Entity must, in a writing satisfactory to the Company, assume all the Franchisee's obligations under this Agreement.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Byrider has the right to assign or transfer the Franchise Agreement to a third party without any restrictions. This includes all of Byrider's rights, obligations, and privileges under the agreement. After Byrider assigns the agreement to a third party who assumes all obligations, Byrider will no longer have any performance or other obligations under the agreement. The agreement will benefit any transferee or legal successor to Byrider's interest in it.
However, if a franchisee wishes to transfer their interest in the Byrider franchise, the franchisee must obtain Byrider's prior written approval, which will not be unreasonably withheld. The rights and duties created by the agreement are personal to the franchisee and its owners, and Byrider has granted the franchise based on their perceptions of the franchisee's character, skills, aptitude, business ability, and financial capacity.
Transfers requiring Byrider's approval include the agreement itself, the franchisee's business, the right to occupy the business location, substantially all of the franchisee's business assets, any ownership interest in the franchisee (if a legal entity), or any ownership interest in the franchisee's owners (if legal entities). Any transfer made without Byrider's approval constitutes a breach of the agreement and has no effect. The term "transfer" includes voluntary, involuntary, direct, or indirect assignments, sales, gifts, or other dispositions, including mergers, consolidations, or the issuance of additional securities or other forms of ownership interest.