Does Carbones Pizzeria have the right to approve transfers 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. (The new agreement may provide for different fees or territory than in your agreement, but we will not require the transferee to pay us a |
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, Carbones Pizzeria retains the right to approve any transfer of the franchise by a franchisee. However, Carbones Pizzeria will not unreasonably withhold approval, provided that all conditions for the transfer are met. This is a fairly standard clause in franchise agreements, designed to allow the franchisor to maintain quality control and ensure that new franchisees are capable of operating the business successfully.
The conditions for Carbones Pizzeria's approval include ensuring the new franchisee meets the company's qualifications, that the transfer fee is paid, that the new franchisee completes the required training, and that both the outgoing franchisee and the incoming franchisee sign the necessary release and franchise agreements. The new franchise agreement may contain different terms, including fees or territory arrangements, than the original agreement. However, Carbones Pizzeria cannot require the new franchisee to pay a new initial franchise fee.
Additionally, Carbones Pizzeria has the right of first refusal to acquire the franchisee's business, meaning they can match any offer made by a potential buyer. This provision allows Carbones Pizzeria to maintain control over the brand and its locations. Franchisees looking to sell their Carbones Pizzeria franchise should be aware of these conditions and understand that a potential sale is contingent on Carbones Pizzeria's approval and right of first refusal.