Does Care Plus Medical Ucc have to approve the proposed assignee as a franchisee?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
LE 15. TRANSFERS**
- 15.1 By Care Plus Medical UCC. Care Plus Medical UCC may transfer or assign this Agreement, or any of its rights or obligations under this Agreement, to any person or entity, and Care Plus Medical UCC may undergo a change in ownership and/or control, without the consent of Franchisee.
- 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that Care Plus Medical UCC entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing Care Plus Medical UCC at least 60 days prior notice of the proposed Transfer, and without obtaining Care Plus Medical UCC's consent. In granting any such consent, Care Plus Medical UCC may impose conditions, including, without limitation, the following:
- (i) Care Plus Medical UCC receives a transfer fee equal to $10,000 plus any broker fees and other out-of-pocket costs incurred by Care Plus Medical UCC;
- (ii) the proposed assignee and its owners have completed Care Plus Medical UCC's franchise application processes, meet Care Plus Medical UCC's then-applicable standards for new franchisees, and have been approved by Care Plus Medical UCC as franchisees;
- (iii) the proposed assignee is not a Competitor;
- (iv) the proposed assignee executes Care Plus Medical UCC's then-current form of franch
Source: Item 22 — CONTRACTS (FDD page 41)
What This Means (2024 FDD)
According to Care Plus Medical Ucc's 2024 Franchise Disclosure Document, if a franchisee wants to transfer their franchise to someone else, Care Plus Medical Ucc's consent is required. Specifically, the proposed assignee must complete Care Plus Medical Ucc's franchise application process, meet the then-applicable standards for new franchisees, and be approved by Care Plus Medical Ucc as a franchisee. This ensures that any new franchisee meets Care Plus Medical Ucc's standards for business skill, financial capacity, personal character, experience, and business ability.
Care Plus Medical Ucc may impose conditions when granting consent for a transfer. These conditions include receiving a transfer fee of $10,000 plus any broker fees and out-of-pocket costs incurred by Care Plus Medical Ucc. The proposed assignee must also execute Care Plus Medical Ucc's current form of franchise agreement, which may contain materially different provisions than the original agreement. Additionally, all owners of the proposed assignee must provide a guaranty, and the proposed assignee must not be a competitor.
These stipulations are typical in franchising, as franchisors want to maintain consistent brand standards and protect their systems. The right of first refusal allows Care Plus Medical Ucc to buy back the franchise if they don't approve of the potential buyer, giving them more control over who joins their system. The requirement for the assignee to meet current standards and sign the current franchise agreement ensures that the franchise remains aligned with the current operational and legal framework of Care Plus Medical Ucc.