What happens if a Byrider franchisee loses possession or control of the business?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
n or other business entity without obtaining the Company's prior written consent and then only upon disclosure of the terms and conditions contained herein being made to the prospective new holders of the ownership interest. Franchisee agrees to execute a guaranty in the form Company prescribes undertaking personally to be bound, jointly and severally, by all provisions of this Agreement and any ancillary agreements between the Company and Franchisee.
14.3 Assignment by Franchisee to Third Party.
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.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, a transfer of ownership, possession, or control of the franchisee's business or substantially all of its assets can only occur with a transfer of the franchise granted under the Franchise Agreement. Any transfer without Byrider's approval constitutes a breach of the agreement and is considered ineffective.
The term "transfer" encompasses both voluntary and involuntary assignments, sales, gifts, or other dispositions, including mergers, consolidations, issuance of additional securities, or the sale of securities convertible to an ownership interest. This broad definition ensures that Byrider retains control over who operates a franchise and maintains the standards of the Byrider system.
Byrider grants the franchise to individuals or entities based on their character, skills, business acumen, and financial capacity. Therefore, the agreement emphasizes that the rights and duties created are personal to the franchisee and its owners. This is a common practice in franchising, as the success of a franchise often depends on the operator's capabilities and commitment. By requiring approval for any transfer, Byrider aims to protect its brand and ensure that new operators meet its standards.