factual

What options does a Coffee News franchisee have if they can no longer operate their franchise?

Coffee_News Franchise · 2025 FDD

Answer from 2025 FDD Document

r 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
    • b) if the officer(s) of the Franchisee's entity decides to sell the Franchise, Franchisor, at its sole discretion, may allow a temporary operating agreement until the Franchise is sold; If the Franchisee's entity is registered as a sole proprietor, Franchisor at its sole discretion may allow a temporary operating agreement signed by a responsible and duly authorized person until such time as the Franchise is sold or transferred to a new owner with Franchisor's approval;

Source: Item 23 — Receipts (FDD pages 36–118)

What This Means (2025 FDD)

According to the 2025 Coffee News Franchise Disclosure Document, a franchisee has options in the event of death or permanent incapacity. Specifically, if requested by the franchisee's heirs, Coffee News may allow a family member or another officer of the franchisee entity to temporarily operate the franchise.

This temporary operation can potentially transition into a full-term operation. However, this is contingent upon Coffee News's approval after the family member demonstrates sufficient skill to manage the franchised business. This ensures that the business continues to operate effectively under new management while maintaining the standards of the Coffee News franchise.

Additionally, the FDD states that the franchisee's interest in the agreement is not transferable and cannot be sold, pledged, assigned, or transferred without the express written consent of Coffee News. However, Coffee News will not unreasonably withhold consent for a transfer. If a transfer is approved, the new franchisee will be required to execute Coffee News's current franchise agreement and related documents, which will govern the remaining term of the original agreement.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.