What is the Coffee News franchisee agreeing to when signing the Franchise Agreement regarding their interest in the franchised business and probate?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.2 Nontransferability of Franchisee's Interest. Franchisee agrees that its interest in this Agreement is not transferable and shall not be sold, pledged, hypothecated, assigned or transferred without the express written consent of Franchisor, provided that Franchisor's consent shall not be unreasonably withheld.
When a transfer is granted by Franchisor, the transferee franchisee shall execute Coffee News' then current Franchise Agreement and related documents to govern the remaining term of this Agreement.
- 11.3 Ownership Changes.
If Franchisee is a corporation or partnership, Franchisee agrees to notify Franchisor of any change in stock ownership or partnership interest in Franchisee while this Agreement is in effect.
Any such change which, together with all prior changes, results in a change of the person or persons having control of the entity shall be a transfer subject to the provisions of this paragraph 10 and its subparagraphs.
- 11.4 Transfer Upon Death or Permanent Incapacity.
Immediately upon the death or permanent incapacity of the Franchisee or if the Franchisee is a corporation, upon its dissolution or upon the death of any person with a substantial or controlling interest in the Franchise, the Franchisee has the following options:
- a) if requested by the Franchisee's heirs, Franchisor, at its sole discretion, may allow a family member of the Franchisee or another officer of the Franchisee entity continue to temporarily operate the franchise.
Such temporary operation may be converted to a full-term operation, which will be contingent upon Franchisor's approval after said family member has developed sufficient skill necessary to operate the franchised business; or
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, a franchisee's interest in the Franchise Agreement is generally not transferable without the franchisor's written consent, which will not be unreasonably withheld. If the transfer is approved, the new franchisee must sign Coffee News' current Franchise Agreement. If the franchisee is a corporation or partnership, Coffee News must be notified of any changes in stock ownership or partnership interest. A change in control of the entity is considered a transfer and is subject to the same provisions.
Upon the death or permanent incapacity of the franchisee, or dissolution of a corporate franchisee, Coffee News offers options for continuing the franchise. If requested by the franchisee's heirs, Coffee News may allow a family member or another officer to temporarily operate the franchise at its sole discretion. This temporary operation can become a full-term operation if the family member develops the necessary skills and receives Coffee News' approval.
This means that a Coffee News franchisee's ability to transfer their franchise is restricted, requiring franchisor approval. In the event of death or incapacity, the agreement allows for potential continuation of the business by family members, subject to the franchisor's approval and the family member's ability to operate the franchise successfully. This provides some flexibility for the franchisee's family while ensuring that Coffee News maintains control over who operates its franchises.