What obligations must a Byrider franchisee fulfill before a control assignment can be approved?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
ents of this Section 14.3.C. A non-controlling (less than 50%) ownership interest in the Franchisee (or its owners), as determined as of the date on which the proposed transfer will occur, may be transferred if the proposed transferee and its direct and indirect owners (if the transferee is a legal entity) are of good character and meet the Company's then applicable standards for franchisees. 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 Byrider's 2025 Franchise Disclosure Document, a franchisee must meet several conditions before a control assignment, such as transferring the franchise agreement or a controlling ownership interest, can be approved. These conditions ensure that the transfer process is compliant and that the new assignee is capable of maintaining the Byrider standards.
Specifically, the franchisee must have fully complied with all obligations under the franchise agreement or any other agreement with Byrider. This includes paying all monetary obligations owed to Byrider, its affiliates, and any third-party vendors. Additionally, the franchisee must have submitted all required reports and statements and complied with all provisions of the agreements during the 60-day period before requesting consent for the transfer, as well as the period between the request and the effective date of the assignment.
Furthermore, the franchisee must correct any existing deficiencies of the business location that Byrider has notified them of. If the control assignment involves the franchise agreement itself, the assignee must agree to upgrade, remodel, and refurbish the business location according to Byrider's current requirements and specifications within a specified time frame. Byrider will inform the assignee of the specific actions and timelines before the control assignment takes effect. The franchisee must also offer to sell, transfer, lease, or assign the agreement and business to Byrider first, unless the assignee is an immediate family member or an approved existing owner. The franchisee is also obligated to pay a transfer fee to Byrider, unless the assignee is an existing owner or an immediate family member. Finally, the franchisee and its transferring owners must comply with non-compete and confidentiality covenants.