Do references to Franchisor or Franchisee in the Coffee News agreement include successors?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
11. SUCCESSORS AND ASSIGNMENT.
11.1 Successors and Assigns of Franchisor. All rights of Franchisor in this Agreement shall inure to the benefit of Franchisor's successors and assigns.
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 Coffee News's 2025 Franchise Disclosure Document, the rights of the franchisor extend to its successors and assignees. Specifically, all rights of Coffee News in the Franchise Agreement benefit the franchisor's successors and assigns. This means that if Coffee News is acquired or merges with another entity, the new entity assumes all of Coffee News's rights under the existing franchise agreements. This is a fairly standard clause in franchise agreements, ensuring business continuity for the franchisor.
However, the franchisee's interest in the agreement is not automatically transferable. The franchisee must obtain express written consent from Coffee News to sell, pledge, hypothecate, assign, or transfer their interest. Coffee News states that it will not unreasonably withhold consent for such a transfer. If a transfer is approved, the new franchisee must execute Coffee News's then-current Franchise Agreement and related documents, which will govern the remaining term of the original agreement. This protects Coffee News by ensuring that any new franchisee meets their current standards and agrees to their current terms.
If the Coffee News franchisee is a corporation or partnership, they must notify Coffee News of any changes in stock ownership or partnership interest that result in a change of control. Such changes are treated as a transfer and are subject to the same approval requirements. In the event of the death or permanent incapacity of the franchisee, Coffee News may, at its discretion, allow a family member or officer to temporarily operate the franchise. This temporary operation can be converted to a full-term operation if the family member develops sufficient skills and receives Coffee News's approval. This provides some flexibility for the franchisee's family while still protecting Coffee News's interests.