Does Casa De Corazon require approval of a transfer by the franchisee?
Casa_De_Corazon Franchise · 2025 FDDAnswer from 2025 FDD Document
pment Agreement - Section 4(a) | | | k. "Transfer" by you – defined | Franchise Agreement - Section 18(b) Development Agreement - Section 4(b) | | l. | Our approval of transfer by | Franchise Agreement - | | | franchisee | Section 18(c) Development Agreement - Section 4(b) | | Provision | Section in Franchise, Development Agreement, or Other Agreements | Summary | |-----------------------------------------------------------|------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | m. Conditions for our approval of transfer | Franchise Agreement - Section 18(c) | Transferee must meet our requirements, including satisfying any licensure requirements imposed by applicable law and sign a new franchise agreement on our then current form for the remaining term of your Agreement. (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 new initial franchise fee.) You must also pay a transfer fee and sign a release (subject to state law).
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–43)
What This Means (2025 FDD)
According to Casa De Corazon's 2025 Franchise Disclosure Document, the company requires approval of any transfer of the franchise by the franchisee. Specifically, Section 18(c) of the Franchise Agreement and Section 4(b) of the Development Agreement address this requirement.
The FDD states that for a transfer to be approved, the transferee must meet Casa De Corazon's requirements, including satisfying any licensure requirements imposed by applicable law and signing a new franchise agreement. This new agreement may have different fees or territory terms than the original agreement, but Casa De Corazon will not require the transferee to pay a new initial franchise fee. Additionally, the franchisee must pay a transfer fee and sign a release, subject to state law.
For the Development Agreement, the franchisee does not have the right to transfer the agreement or any interest in it without Casa De Corazon's consent. This requirement ensures that Casa De Corazon maintains control over who operates franchises and that the new operators meet their standards. This is a fairly standard practice in franchising, as franchisors want to ensure that any new franchisees are qualified and capable of maintaining the brand's reputation and operational standards.