What payments must a Chocolate Fish Coffee franchisee make to be in compliance with contractual requirements before a transfer?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise | Summary |
|---|---|---|
| or other agreement | ||
| k. “Transfer” by | FA: Article 1 | For you (or any owner of your business) to |
| franchisee - defined | ||
| MUDA: Background | voluntarily or involuntarily transfer, sell, or | |
| Statement | dispose of, in any single or series of transactions, (i) substantially all of the assets of the business, (ii) the franchise agreement, (iii) any direct or indirect ownership interest in the business, or (iv) control of the business. | |
| l. Franchisor’s approval of | FA: § 15.2 | No transfers without our approval. No transfers without our approval. |
| transfer by franchisee | MUDA: § 7 | |
| m. Conditions for | FA: § 15.2 | Pay transfer fee; buyer meets our standards; |
| franchisor’s approval of | ||
| transfer | ||
| MUDA: none | buyer is not a competitor of ours; buyer and its owners sign our then-current franchise agreement and related documents (including personal guaranty); you’ve made all payments to us and are in compliance with all contractual requirements; buyer completes training program; you sign a general release; business complies with then-current system specifications (including remodel, if applicable). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 33–36)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, a franchisee must have made all payments due to Chocolate Fish Coffee and be in compliance with all contractual requirements before a transfer of the franchise will be approved.
This means that if a franchisee is considering selling their Chocolate Fish Coffee business, they must first ensure that all outstanding financial obligations to the franchisor are settled. This includes any unpaid franchise fees, royalty payments, marketing contributions, or other amounts owed under the Franchise Agreement or any other related agreements.
In addition to settling outstanding payments, the franchisee must also be in full compliance with all other contractual obligations. This could include adhering to Chocolate Fish Coffee's operational standards, maintaining the premises in good condition, and fulfilling any marketing or advertising requirements. Failure to meet these requirements could delay or prevent the transfer of the franchise. Prospective franchisees should carefully review the Franchise Agreement to understand all of their obligations and ensure they are in compliance before attempting to transfer their franchise.