Does the Carbones Pizzeria franchisor have the right to approve a transfer of the franchise by the franchisee?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | ||
| a. Length of the Franchise term | Section 2 | 10 years from date of signing the Franchise Agreement |
| b. Renewal or extension of the term | Section 2 (See Note 2) | One 10 year term |
| c. Requirements for franchisee to renew or extend | Section 2 | Sign new agreement (which may contain materially different terms and conditions than your original Franchise Agreement), pay renewal fee, update your Restaurant to meet our then-current requirements for new restaurants |
| d. Termination by franchisee | None | Not applicable |
| e. Termination by franchisor without | None | Not applicable |
| cause | ||
| f. Termination by franchisor with cause | Section 15 | We may terminate only if you do one of the things described in Section 15 |
| g. "Cause" defined – curable defaults | Sections 15(e) through 15(f) | You have 30 days to cure nonpayment of fees, sanitation problems, non submission of reports and any other default not listed in Section 15 |
| h. "Cause" defined – non-curable defaults | Sections 15(a) through 15(d) | Non curable defaults include abandonment, trademark misuse and conviction of an offense directly related to the Restaurant business |
| i. Franchisee's obligations on termination/nonrenewal | Section 16 | Obligations include complete de identification and payment of amounts due. (See also "Noncompetition covenants after the franchise is terminated or expires" below.) |
| j. Assignment of contract by franchisor | No restriction on our right to assign | |
| k. "Transfer" by franchisee – defined | Sections 13 and 14 | Includes transfer of Franchise Agreement or assets or ownership change |
| l. Franchisor's approval of transfer by franchisee | Section 13 | We have the right to approve all transfers but will not unreasonably withhold approval so long as all conditions to transfer have been satisfied |
| m. Conditions for franchisor approval of transfer | Section 13(b) | New franchisee qualifies, transfer fee paid, training completed, release signed by you and current agreement signed by new franchisee. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 24–26)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the franchisor retains the right to approve any transfer of the franchise by the franchisee. Specifically, the FDD indicates that Carbones Pizzeria "will not unreasonably withhold approval so long as all conditions to transfer have been satisfied." This means that while franchisees are not entirely restricted from selling or transferring their franchise, they must obtain the franchisor's consent first. This is a fairly standard practice in franchising, allowing the franchisor to maintain control over who operates under their brand.
Several conditions must be met for a transfer to be approved by Carbones Pizzeria. These conditions include ensuring the new franchisee meets the franchisor's qualifications, payment of a transfer fee, completion of required training by the new franchisee, and the signing of a release by the current franchisee. Additionally, the new franchisee must sign the current franchise agreement. However, the franchisor notes that the new agreement may provide for different fees or territory than in the original agreement.
Furthermore, Carbones Pizzeria maintains the right of first refusal, meaning they can match any offer made for the franchisee's business. This allows Carbones Pizzeria to acquire the franchise themselves if they choose. These provisions are designed to protect the Carbones Pizzeria brand and ensure that any new franchisees meet their standards, while also giving the franchisor an option to regain control of a franchise location.