Is there a specific definition of 'Transfer' provided in this section of the Carvel FDD?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
16.1 Definition of Transfer. For purposes of this Agreement, "Transfer" as a verb means to sell, assign, give away, transfer, pledge, mortgage, or encumber, either voluntarily or by operation of law (such as through divorce or bankruptcy proceedings), any interest in this Agreement, the Franchised Business, substantially all the assets of the Franchised Business, or in the ownership of the franchisee (if you are an Entity). "Transfer" as a noun means any such sale, assignment, gift, transfer, pledge, mortgage, or encumbrance. A "Control Transfer" means any Transfer of (i) this Agreement or any interest in this Agreement; (ii) the Franchised Business or all or substantially all of the Franchised Business's assets; or (iii) any Controlling Interest (defined below) in you (if you are an Entity), whether directly or indirectly through a transfer of legal or beneficial ownership interests in any Owner that is an Entity, and whether in one transaction or a series of related transactions, regardless of the time period over which these transactions take place. References to a "Controlling Interest" in you mean either (i) 20% or more of the direct or indirect legal or beneficial ownership interests in your Entity or (ii) the acquisition of an ownership interest or other right or interest which grants the power (whether directly or indirectly) to direct or
cause the direction of management and polices of you or the Franchised Business to any individual or Entity, or group of individuals or Entities, that did not have that power before that acquisition.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the term "Transfer" is specifically defined within the context of the franchise agreement. The definition covers various scenarios where the franchisee's interest in the agreement or the franchised business changes hands.
Specifically, "Transfer" as a verb includes actions such as selling, assigning, giving away, transferring, pledging, mortgaging, or encumbering any interest in the Franchise Agreement, the Franchised Business, or the ownership of the franchisee entity. This can occur voluntarily or involuntarily, such as through divorce or bankruptcy proceedings. As a noun, "Transfer" encompasses any such sale, assignment, gift, transfer, pledge, mortgage, or encumbrance.
The FDD also defines a "Control Transfer" as any transfer of the agreement itself, any interest in the agreement, the Franchised Business, substantially all of the Franchised Business's assets, or any Controlling Interest in the franchisee entity. A "Controlling Interest" is defined as either 20% or more of the direct or indirect legal or beneficial ownership interests in the franchisee's entity, or the acquisition of an ownership interest that grants the power to direct the management and policies of the franchisee or the Franchised Business.