Does Cinch I.T. require approval for a franchisee's transfer of the franchise?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| m. Conditions for franchisor approval of transfer | Section 28 | You must not be in default at time of transfer, you must sign a release, the proposed transferee must meet new franchisee qualifications, sign the then-current franchise agreement, pay training fee and complete training, and pay transfer fee. |
| n. Franchisor's right of first | Section 31 | We have 30 days to match |
| refusal to acquire franchisee's | bona fide offers for your | |
| business | business. | |
| o. Franchisor's option to purchase franchisee's business | Section 35 | If your Franchise Agreement is terminated, we may, but are not obligated to, buy your inventory, supplies and equipment. |
| p. Death or disability of franchisee | Section 29 | May transfer franchise to spouse, heirs or relatives if they are qualified. Otherwise, your estate has 6 months to transfer to a qualified buyer. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 48–56)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the franchisee needs to get approval from Cinch I.T. to transfer the franchise.
The FDD states several conditions that a franchisee must meet to get approval for a transfer. The franchisee must not be in default at the time of the transfer. The franchisee needs to sign a release. The person who wants to take over the franchise has to meet the requirements for new franchisees. The new franchisee must also sign the current franchise agreement, complete the training, and pay both a training fee and a transfer fee.
In addition to these conditions, Cinch I.T. has the right of first refusal. This means that Cinch I.T. has 30 days to match any legitimate offers made for the franchisee's business. Cinch I.T. also has the option to purchase the franchisee's business if the Franchise Agreement is terminated; however, Cinch I.T. is not obligated to do so.
In the event of the death or disability of the franchisee, the franchise may be transferred to a spouse, heirs, or relatives if they meet the qualifications. If not, the franchisee's estate has six months to find a qualified buyer for the franchise.