Under what conditions can City Publications refuse a transfer of ownership of a franchise in Michigan?
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.
◼ The failure of the Franchisee or proposed transferee to pay any sums owing to the Franchisor or to cure any default in the Franchise Agreement existing at the time of the proposed transfer.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, Michigan franchisees are subject to specific conditions under which City Publications may refuse a transfer of ownership. City Publications can refuse a transfer of ownership of a franchise, except for good cause. This does not prevent City Publications from exercising a right of first refusal to purchase the franchise.
Good cause for refusal includes several factors related to the proposed transferee. City Publications may refuse the transfer if the proposed transferee does not meet the then-current reasonable qualifications or standards that City Publications has in place. If the proposed transferee is a competitor of City Publications, this also constitutes good cause for refusal. Additionally, if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations, City Publications can refuse the transfer.
City Publications can also refuse a transfer if the franchisee or the proposed transferee has not paid all sums owing to City Publications or has failed to cure any default in the Franchise Agreement existing at the time of the proposed transfer. These conditions ensure that City Publications maintains control over who becomes a franchisee and that the financial and legal obligations are met before a transfer is approved.