What standards must a person meet to be approved by Byrider as a transferee after the death or incapacity of the franchisee?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
comply with the covenants under Sections 18.1 and 18.2.
The Franchisee acknowledges and agrees that the Company may review all information regarding the Franchisee's Business that the Franchisee gives the Assignee, correct any information that the Company believes to be inaccurate, and give the Assignee copies of any
reports that the Franchisee has given the Company or the Company has made regarding the Franchisee's Business.
14.4 Death or Incapacity of the Franchisee.
A. In the event of the death or incapacity of the Franchisee (if it is a natural person) or the death or incapacity of Franchisee's principal owner (if Franchisee is a legal entity), the Franchisee's or such principal owner's heirs, personal representatives, executors, guardians, administrators or conservators, as applicable, shall, within one hundred eighty (180) days following such death or incapacity, complete the transfer of the Franchisee's interest in this Agreement, the Franchisee's Business and Business Location or, as applicable, of the principal owner's interest in Franchisee, to a person or entity approved by the Company. The person to whom such interests are proposed to be transferred must meet the Company's standards for new franchisees, agree to execute the then-current form of franchise agreement, and, within ninety (90) days after the death or legal incapacity of the Franchisee (or the death or legal incapacity of the principal owner of the Franchisee if the Franchisee is a legal entity), shall have satisfactorily completed the Company's then current Initial Training Program; provided that the transferee will not be required to execute the then-current form of franchise agreement if the transferee is an immediate family member of Franchisee (or the deceased owner if Franchisee is an entity). If at the time of such death or legal incapacity the Franchisee has employed a manager who has satisfactorily completed such training program, such manager shall be deemed to have satisfied such training requirements. The term "incapacity" means a mental or physical disability, impairment, or condition that is reasonably expected to prevent or actually does prevent the Franchisee or its principal owner from supervising the management and operation of the Franchisee's Business. In the event the transferee is an immediate family member of Franchisee (or the deceased owner if Franchisee is an entity), then no Transfer Fee shall be due to the Company.
14.5 Effect of Consent to Transfer. The Company's consent to an Assignment of this Agreement, the Franchisee's Business, the right to occupy the Business Location, or any interest in Franchisee or its owners, is not a representation of the fairness of the terms of any contract between the Franchisee and the Assignee, a guarantee of the prospects of success of the Franchisee's Business or the Assignee, or a waiver of any claims the Company has against the Franchisee (or its owners) or of the Company's right to demand the Assignee's full compliance with this Agreement.
14.6 No Encumbrance. Neither Franchisee nor its owners shall have the right to pledge, encumber, hypothecate, or otherwise give any third party a security interest in (i) the ownership interests of Franchisee or its owners, as applicable, or (ii) this Agreement, in any manner whatsoever, unless (a) the Company provides its prior written consent, which consent may be withheld for any reason whatsoever in the Company's sole judgment and (b) the secured party agrees that its claims will be subordinate to all amounts the Franchisee owes at any time to the Company or its affiliates.
ARTICLE XV
RIGHT OF FIRST REFUSAL
- 15.1 Procedure Regarding Right of First Refusal and Assignment. If the Franchisee (or any of its owners) at any time determine to effectuate a Control Assignment, the Franchisee agrees to obtain from a responsible and fully disclosed buyer, and send to Company a true and complete copy of a bona fide, executed written offer (which may include a letter of intent) relating exclusively to the Control Assignment. The offer must include details of the payment terms of the proposed sale and the sources and terms of any financing for the proposed purchase price.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, in the event of the death or incapacity of a franchisee or their principal owner, their heirs have 180 days to transfer the franchise interest to someone approved by Byrider. The person must meet Byrider's standards for new franchisees and agree to execute the then-current franchise agreement.
The transferee must also satisfactorily complete Byrider's current Initial Training Program within 90 days of the franchisee's death or incapacity. However, this training requirement is waived if the transferee is an immediate family member or if the franchisee already employed a manager who has completed the training. If the transferee is an immediate family member, the transfer fee is also waived.
In cases of a controlling ownership transfer, the assignee must demonstrate the aptitude, skills, qualifications, credit, and financial resources necessary to manage the Byrider business. They must also comply with all obligations to Byrider and not have any ownership in a competitive business. Additionally, the Business Location's landlord must allow the lease to be transferred to the assignee, who must assume all lease obligations without default.