Under what conditions will C3 Wellness Spa not unreasonably withhold approval of a transfer?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
Provided Franchisee and each Owner and Spouse, respectively, are in substantial compliance with this Agreement and the Ancillary Agreements, and Franchisor does not elect to exercise Franchisor's right of first refusal as set forth in Article 14.F below, Franchisor shall not unreasonably withhold its approval of a Transfer by Franchisee or an Owner. The proposed transferee (including such assignee's owner(s) and spouse(s) if the proposed transferee is a Corporate Entity) must be of good moral character, have sufficient business experience, aptitude and financial resources to own and operate a Spa Location Franchise, and otherwise meet Franchisor's then applicable standards for franchisees as determined by Franchisor in its sole, but reasonable discretion. Furthermore, the proposed transferee and the proposed transferee's owners and spouses may not own or operate, or intend to own or operate, a Competitive Business. Franchisee agrees that Franchisor may condition approval of a Transfer upon Franchisee's satisfaction (either before, or contemporaneously with, the effective date of the Transfer) of the following:
- (1) Franchisee must provide written notice to Franchisor of the proposed Transfer of this Agreement at least 30 days prior to the Transfer, and Franchisee must have also satisfied the obligations set forth in Article 14.F below;
- (2) All accrued monetary obligations of Franchisee and all other outstanding obligations to
Franchisor and/or Franchisor's affiliates under this Agreement and the Ancillary Agreements must be satisfied in a timely manner, and Franchisee must satisfy all trade, supplier, and vendor accounts and other debts, of whatever nature or kind, in a timely manner;
(3) Franchisee, each Owner, and each Spouse must not be in default or material breach of this Agreement or the Ancillary Agreements;
(4) The transferee shall be bound by all terms and conditions of this Agreement, and each owner of the transferee and their respective spouses shall personally execute the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1;
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, C3 Wellness Spa will not unreasonably withhold approval of a transfer if the franchisee and each owner and spouse are in substantial compliance with the Franchise Agreement and Ancillary Agreements, and if C3 Wellness Spa does not elect to exercise its right of first refusal.
For a transfer to be approved, the proposed transferee (including their owners and spouses, if applicable) must demonstrate good moral character, sufficient business experience, aptitude, and financial resources to operate a C3 Wellness Spa location. The transferee must also meet C3 Wellness Spa's standards for franchisees, as determined by C3 Wellness Spa in its reasonable discretion. Additionally, the proposed transferee and their owners and spouses cannot own or operate a Competitive Business.
C3 Wellness Spa may require the franchisee to meet certain conditions before or during the transfer, including providing written notice of the proposed transfer at least 30 days in advance and fulfilling obligations outlined in Article 14.F of the agreement. All accrued monetary obligations and outstanding debts to C3 Wellness Spa, its affiliates, trade suppliers, and vendors must be satisfied in a timely manner. The franchisee, each owner, and each spouse must not be in default or material breach of the Franchise Agreement or Ancillary Agreements. The transferee must agree to be bound by all terms and conditions of the Franchise Agreement, and each owner of the transferee and their respective spouses must personally execute the Franchise Owner and Spouse Agreement and Guaranty.