Which article of the Counselor Realty Franchise Agreement addresses transfer of the franchise?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
extent caused by direct and proximate consequences of our negligence.
9. TRANSFER OF FRANCHISE.
- 9.1 Transfer Standards. You agree not to change or allow a change, directly or indirectly, in the ownership or Control of (i) your interest in this Agreement, (ii) the Office, any Additional Office, any Extension Office or Business, (iii) a majority of the assets of the Office, any Additional Office, any Extension Office or Business, or (iv) if Franchisee is an entity, any ownership interest in, or Control of, Franchisee or any direct or indirect owner of Franchisee (each, a "transfer"), without having first tendered to us the right of first refusal to acquire this Agreement, such assets or such interests in accordance with Section 9.6 and, if we do not exercise such right, without our consent and without satisfaction of the conditions stated below. You and your transferee must follow the procedures set forth in Section 9.2, below, and the transferee must sign the then-current form of Counselor Franchise Agreement for the unexpired term, unless the Franchisee is an entity and the transfer is a transfer of an ownership interest in Franchisee or any owner of Franchisee. We will consent to a transfer if the conditions specified in this Agreement in our opinion are satisfied and the transferee in our opinion is qualified to operate the Business in compliance with that Agreement. Notwithstanding anything contained herein to the contrary, Counselor's consent will not be required for, and the right of first refusal set forth in Section 9.6 will not apply to, a transfer described in clause (iv) of the first sentence of this Section 9.1 if (x) such transfer (in a single transaction or series of related transactions) will not result in a change in Control of Franchisee or such direct or indirect owner of Franchisee, (y) you provide Counselor with written notice of such transfer, together with such other information concerning such transfer and transferee as we may require, at least thirty (30) days prior to the consummation of such transfer, and (z) if such transfer is a transfer of an ownership interest in Franchisee, such transferee executes the guaranty attached to this Agreement and delivers such guaranty to Counselor within ten (10) days of such transfer. For purposes of this Article 9, "Control" means, with respect to the applicable person or entity, ownership or control, directly or indirectly, of a majority of the voting ownership of such person or entity or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person or entity, by contract or otherwise.
- 9.2 Other Conditions to Transfer. You must apply for our consent by submitting written notice of the pending transfer, with a complete application, signed by you and by the proposed transferee, and payment of the transfer fee, at least 60 days before the proposed transfer date. The transfer fee is $2,000 and applies to all transfers (excluding transfers described in, and in accordance with, the second to last sentence of Section 9.1). We may specifically withhold consent if: (i) you do not pay all amounts you owe to Counselor or its affiliates or to your suppliers; (ii) you (or the transferee) do not complete the repair, maintenance or upgrade of the Business' facility, fixtures, equipment, and signage to then-current System standards; or (iii) all shareholders or owners of the transferee do not execute the guaranty of the new Agreement.
- 9.3 Franchisee Death or Disability. Your death, disability or incapacity (or of a principal officer, director or partner of Franchisee) is also a "transfer." Your executor, heir or legal representative (or the corporation or partnership, if an entity) must apply within 60 days of the death or incapacity for our consent to transfer this Agreement and satisfy the other conditions above.
- 9.4 Transfer by Franchisor.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 16–17)
What This Means (2025 FDD)
According to the 2025 Counselor Realty Franchise Disclosure Document, Article 9 of the Franchise Agreement pertains to the transfer of the franchise. Section 9.1 outlines the transfer standards, stating that a franchisee must first offer Counselor Realty the right of first refusal before transferring their interest in the agreement, the office, business, or business assets. This also applies to any ownership interest in the franchisee if the franchisee is an entity.
Before a transfer can occur, the franchisee and the proposed transferee must adhere to the procedures outlined in Section 9.2. The transferee is typically required to sign the then-current form of the Counselor Realty Franchise Agreement for the remaining term, unless the transfer involves an ownership interest in a franchisee entity. Counselor Realty's consent is needed for the transfer, and it will be granted if the conditions specified in the agreement are met and the transferee is deemed qualified to operate the business in compliance with the agreement.
However, Counselor Realty's consent and the right of first refusal are not required if the transfer does not result in a change of control of the franchisee, the franchisee provides written notice at least 30 days before the transfer, and if the transfer involves an ownership interest, the transferee executes the guaranty attached to the agreement within ten days of the transfer. Section 9.6 further details Counselor Realty's right of first refusal, stating that if a franchisee proposes a transfer to a third party, they must first offer to sell their interest to Counselor Realty, providing all terms of the offer in writing. Counselor Realty then has 30 days to accept the offer. If Counselor Realty declines, the franchisee has 60 days to complete the transfer with the third party, in accordance with Article 9.