Is a proposed transferee's unwillingness to comply with all lawful obligations considered good cause for City Publications to refuse a transfer?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
- ◼ A provision which permits a Franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause.
The subdivision does not prevent a Franchisor from exercising a right of first refusal to purchase the franchise.
Good cause shall include, but is not limited to:
◼ The failure of the proposed transferee to meet the Franchisor's then-current reasonable qualifications or standards.
◼ The fact that the proposed transferee is a competitor of the Franchisor or Subfranchisor.
◼ The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, a proposed transferee's unwillingness to agree in writing to comply with all lawful obligations is considered good cause for City Publications to refuse a transfer of ownership of a franchise. This provision does not prevent City Publications from exercising a right of first refusal to purchase the franchise.
This means that if a franchisee wishes to sell their City Publications franchise to someone else, that potential buyer must agree to adhere to all legal and contractual requirements. If the proposed transferee is unwilling to commit to these obligations in writing, City Publications has grounds to deny the transfer.
For a prospective franchisee, this highlights the importance of ensuring any potential buyer of their franchise is fully aware of and willing to accept all the legal and contractual obligations. Failure to ensure this could result in City Publications blocking the sale. It also protects City Publications by ensuring that any new franchisee meets their standards and will operate the franchise in compliance with all applicable laws and the franchise agreement.