Can Care Plus Medical Ucc transfer the franchise agreement without the franchisee's consent?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
ase price directly to the lienholder to pay off such lien. Care Plus Medical UCC may withhold 25% of the purchase price for 90 days to ensure that all of Franchisee's taxes and other liabilities are paid. Care Plus Medical UCC may assign this purchase option to another party.
ARTICLE 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, Care Plus Medical Ucc can transfer the franchise agreement to another party without the franchisee's consent. Specifically, Care Plus Medical Ucc can transfer or assign the agreement, or its rights and obligations, to any person or entity. Additionally, Care Plus Medical Ucc may undergo a change in ownership or control without needing the franchisee's approval.
This clause gives Care Plus Medical Ucc significant flexibility in the management and potential sale of the franchise system. For a prospective franchisee, this means that the entity they initially contracted with could change without their direct input or consent. While the terms of the agreement should remain in effect, the new owner might have a different management style or business priorities.
In contrast, the franchisee's ability to transfer the agreement is significantly restricted. The franchisee must provide Care Plus Medical Ucc with at least 60 days' notice and obtain Care Plus Medical Ucc's consent for any transfer. Care Plus Medical Ucc can impose conditions on the transfer, including a $10,000 transfer fee plus any broker fees and out-of-pocket costs incurred by Care Plus Medical Ucc. The assignee must also meet Care Plus Medical Ucc's standards for new franchisees and execute the then-current form of the franchise agreement, which may contain materially different provisions. This disparity in transfer rights is not uncommon in franchising, as franchisors typically want to maintain control over who operates their branded businesses.