Are there any stated conditions for Coffee News USA's approval of a transfer by a franchisee?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| c. Requirements for you to renew or extend. See Note 7(c) for details. | Section 3.2 Exhibit A | Comply with terms in franchise agreement. You may be required to sign a franchise agreement containing terms and conditions that could be materially different from the original franchise agreement. |
| d. Termination by you. | Sections 13.3, 14.1, 14.3 | 120 days notice required. Deposit |
| Exhibit A | is nonrefundable. | |
| e. Termination by Coffee | None, Exhibit A | We will not terminate without cause. |
| News USA without cause. | ||
| f. Termination by Coffee News USA with cause. | Section 13.1, Exhibit A | We can terminate if you breach or default under any provision of the franchise agreement. |
| g. "Cause" defined defaults | None, Exhibit A | There exists no provisions for |
| which can be cured. | defaults which may be cured. | |
| h. "Cause" defined defaults that cannot be cured. | Sections 13.1, 13.2, Exhibit A | Waivers for prior breaches or defaults are not binding against same or different breaches or defaults. |
| i. Your obligations on termination / nonrenewal. | Section 14.3, Exhibit A | You shall return all materials and information relevant to sales and production of Coffee News. |
| j. Assignment of contract by Coffee News USA. | Section 11.1, Exhibit A | Franchise agreement does not specifically restrict or permit us to assign our rights but this section does suggest that it is permitted. |
| k. "Transfer" by you | Sections 11.2, 11.3, 16.4, | Transfers are prohibited unless we |
| definition. | Exhibit A | consent. |
| l. Coffee News USA's | Sections 11.2, 16.4, | Our consent to transfer will not be |
| approval of transfer by you. | Exhibit A | unreasonably withheld. |
| m. Conditions for Coffee News USA's approval of transfers. | Not Applicable | We do not provide conditions for approval of transfers. |
| n. Coffee News USA's right of first refusal to acquire your business. | Sections 11.2; 11.3 Exhibit A | Not applicable. |
| o. Coffee News USA's | Not Applicable | Not applicable. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 25–27)
What This Means (2025 FDD)
According to Coffee News's 2025 Franchise Disclosure Document, there are no specific conditions listed for the franchisor's approval of a transfer by a franchisee. The FDD indicates that transfers are prohibited unless Coffee News consents to the transfer. However, Coffee News's consent to a transfer will not be unreasonably withheld.
This means that while franchisees cannot freely transfer their franchise to another party without approval, Coffee News cannot arbitrarily deny a transfer request. The franchisor must have a legitimate, reasonable basis for withholding consent. This provides some protection to the franchisee, but it's important to understand what Coffee News considers 'unreasonable' in this context.
Prospective franchisees should seek clarification from Coffee News regarding the criteria and process for transfer approval. Understanding the factors that Coffee News will consider when evaluating a potential transfer can help franchisees plan for future exit strategies and ensure compliance with the franchise agreement. It would be prudent to discuss potential scenarios and examples of what might constitute a reasonable or unreasonable denial of a transfer request.