What happens if a Byrider franchisee attempts to transfer the franchise without the Company's approval?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
A. The Franchisee understands and acknowledges that the rights and duties this Agreement creates are personal to the Franchisee and its owners and that the Company has granted the Franchisee the franchise in reliance upon its perceptions of the Franchisee's and its owners' individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, none of the following (each a "Transfer") may be transferred without the Company's prior written approval which will not be unreasonably withheld: (i) this Agreement (or any interest in this Agreement); (ii) the Franchisee's Business (or any right to receive all or a portion of the Franchisee's Business' profits or losses or capital appreciation related to the Franchisee's Business); (iii) the right to occupy the Business Location; (iv) substantially all of the assets of the
Franchisee's Business; (v) any ownership interest in the Franchisee (if the Franchisee is a legal entity); or (vi) any ownership interest in any of the Franchisee's owners (if such owners are legal entities). A transfer of the ownership, possession or control of the Franchisee's Business, or substantially all of its assets, may be made only with a transfer of the franchise granted under this Agreement. Any transfer without the Company's approval is a breach of this Agreement and has no effect.
A "transfer" shall not include a transfer of a deceased owner's ownership interest in Franchisee or Franchisee's owner to an existing owner so long as a new majority owner, if any, signs all documents a majority owner is required to sign under this Agreement.
- B.
In this Agreement, the term "Transfer" includes a voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition.
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;
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the rights and duties within the Franchise Agreement are specific to the franchisee and its owners, as Byrider grants the franchise based on their assessment of the franchisee's character, skills, business ability, and financial capacity. Therefore, any transfer of the agreement or the franchisee's business requires Byrider's prior written approval, which Byrider will not unreasonably withhold.
A "Transfer" includes various scenarios such as transferring the agreement itself, the franchisee's business, rights to the business location, assets, or ownership interests. Specifically, a transfer encompasses voluntary, involuntary, direct, or indirect assignments, sales, gifts, or other dispositions, including mergers, consolidations, or the issuance of additional securities. However, a transfer does not include the transfer of a deceased owner's interest to an existing owner, provided a new majority owner signs all required documents.
If a franchisee attempts to transfer the franchise without obtaining Byrider's approval, it is considered a breach of the Franchise Agreement and the transfer will have no legal effect. This means the attempted transfer is invalid, and the original franchisee remains bound by the terms of the agreement. This provision ensures Byrider maintains control over who operates its franchises and upholds the standards of its brand.