Under what conditions can Casiola refuse a transfer of ownership of a franchise?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
of this Agreement including, but not limited to this Article 14.B. shall constitute a breach of this Agreement and shall convey to the transferee no rights or interests in this Agreement; and
- (5) In the event of a Transfer of this Agreement that is approved by Franchisor, Franchisee shall not be relieved of Franchisee's obligations under this Agreement whether said obligations accrued and/or arose prior to and/or after the date of Transfer.
14.C. CONDITIONS FOR APPROVAL OF TRANSFER
Provided Franchisee and each Owner, respectively, are in substantial compliance with this Agreement and the Ancillary Agreements, and Franchisor does not elect to exercise Franchisor's right of first refusal as set forth in Article 14.F. below, Franchisor shall not unreasonably withhold its approval of a Transfer by Franchisee or an Owner. The proposed transferee, including such assignee's owners, if the proposed transferee is a Corporate Entity, must be of good moral character, have sufficient business experience, aptitude and financial resources to own and operate a Casiola Business, and otherwise meet Franchisor's then applicable standards for franchisees as determined by Franchisor in its sole, but reasonable discretion. Furthermore, the proposed transferee and the proposed transferee's owners may not own or operate, or intend to own or operate, a Competitive Business. Franchisee agrees that Franchisor may condition approval of a Transfer upon Franchisee's satisfaction (either before, or contemporaneously with, the effective date of the Transfer) of the following:
- (1) Franchisee must provide written notice to Franchisor of the proposed Transfer of this Agreement at least 30 days prior to the Transfer, and Franchisee must have also satisfied the obligations set forth in Article 14.F. below;
- (2) All accrued monetary obligations of Franchisee and all other outstanding obligations to Franchisor and/or Franchisor's affiliates under this Agreement and the Ancillary Agreements must be satisfied in a timely manner, and Franchisee must satisfy all trade, supplier, and vendor accounts and other debts, of whatever nature or kind, in a timely manner;
- (3) Franchisee and each Owner must not be in default or material breach of this Agreement or the Ancillary Agreements;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, Casiola can refuse a transfer of ownership if the franchisee or owner is not in substantial compliance with the Franchise Agreement and Ancillary Agreements, or if Casiola exercises its right of first refusal. Even if Casiola doesn't exercise its right of first refusal, Casiola will not unreasonably withhold approval of a transfer, provided that the proposed transferee meets certain standards.
The proposed transferee must be of good moral character, possess sufficient business experience, aptitude, and financial resources to operate a Casiola Business, and meet Casiola's standards for franchisees. The transferee and their owners cannot own or operate a Competitive Business. Casiola may also require the franchisee to fulfill certain conditions before approving a transfer, such as providing written notice at least 30 days prior to the transfer and satisfying obligations outlined in Article 14.F.
Additional conditions include satisfying all accrued monetary obligations and other outstanding obligations to Casiola and its affiliates, ensuring that the franchisee and each owner are not in default or material breach of the Franchise Agreement or Ancillary Agreements, and ensuring the transferee is bound by all terms and conditions of the agreement. The owner of the transferee must also personally execute the Franchise Owner Agreement and Guaranty. The franchisee must also pay Casiola a $10,000 transfer fee.