Does C3 Wellness Spa require prior written consent for franchise transfers?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
| l. | Franchisor's approval of transfer | 14.B. | Transfers require our prior written consent, which may be |
|---|---|---|---|
| by franchisee | granted or withheld in our discretion. | ||
| m. | Conditions for franchisor's approval of transfer | 14.C. | For approval of your transfer, you must provide us with 30 days prior written notice of the proposed transfer; you and your Owners must not have defaulted in your obligations under the Franchise Agreement and all other agreements with us; you and your Owners must be in compliance with your obligations under the Franchise Agreement and all other agreements with us; the transferee must agree to be bound by all of the terms and provisions of the Franchise Agreement; the transferee's owners and their spouses must personally guarantee all of the terms and provisions of the Franchise Agreement; you and your Owners and their spouses must sign a general release in favor of us; the transfer must provide for the assignment and/or ownership of the approved location for the Franchised Business, and the transferees continued use and occupancy of such location throughout the term of the Franchise Agreement; the assets of the Franchised Business must be transferred to the transferee; the transferee and the transferee's owners and managers, at the transferee's expense must complete our training programs; we waive our right of first refusal; and we approve of the transfer and transferee in writing and subject to our discretion; and you pay the Transfer Fee (subject to applicable state laws). |
| n. | Franchisor's right of first refusal to acquire franchisee's business | 14.F. | We have the right to match any offer to purchase your Spa Location Franchise or the Corporate Entity operating your Spa Location Franchise. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–50)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, franchise transfers require the franchisor's prior written consent. This consent can be granted or withheld at C3 Wellness Spa's discretion, meaning they have significant control over who becomes a franchisee within their system.
For a C3 Wellness Spa franchisee looking to transfer their franchise, several conditions must be met to obtain approval. The franchisee must provide 30 days prior written notice to C3 Wellness Spa. Both the franchisee and their owners must be in full compliance with all obligations under the Franchise Agreement and any other agreements with C3 Wellness Spa, with no outstanding defaults.
The prospective transferee must agree to be bound by all terms of the Franchise Agreement, and their owners and spouses must personally guarantee these terms. Additionally, the transferring parties (franchisee, owners, and their spouses) must sign a general release in favor of C3 Wellness Spa. The transfer must ensure the continued use and occupancy of the approved location for the duration of the Franchise Agreement, and all assets of the Franchised Business must be transferred to the new owner. The transferee and their management team must also complete C3 Wellness Spa's training programs at their own expense. Finally, C3 Wellness Spa must waive its right of first refusal and provide written approval of both the transfer and the transferee, subject to their discretion, and the franchisee must pay the Transfer Fee.
C3 Wellness Spa also retains the right of first refusal, allowing them to match any offer made to purchase a franchisee's Spa Location Franchise or the Corporate Entity operating the franchise. This provision gives C3 Wellness Spa the option to acquire the business themselves, maintaining control over the location and operations. These stipulations are fairly standard in franchising, as franchisors typically want to ensure that any new franchisee meets their standards and is a good fit for the brand.