What conditions must be met for Counselor Realty's approval of a franchisee transfer?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section(s) in Franchise or Other Agreement | Summary |
|---|---|---|
| k. "Transfer" by franchisee -- definition | Section 9.1 | Includes transfer of your interest in Franchise Agreement, the Office, Business or Business assets, or an interest in your business entity or your owners |
| l. Franchisor approval of transfer by franchisee | Section 9.1 | Counselor has the right to consent to all transfers (other than a transfer of less than a majority interest in your business entity or your owners) and will consent if Counselor deems transferee qualified and conditions specified in Franchise Agreement are satisfied |
| m. Conditions for franchisor approval of transfer | Sections 9.1, 9.2 | Transferee qualifies; payment of transfer fee; payment of all amounts owing; renovation to then-current System standards; execution of guaranty by buyer's shareholders or owners |
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.
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.
- 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.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 25–29)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, a franchisee needs Counselor Realty's approval to transfer their interest in the Franchise Agreement, the Office, Business, or Business assets. This also applies to transferring an interest in the franchisee's business entity or its owners. Counselor Realty maintains the right to consent to all transfers unless it involves less than a majority interest in the business entity or its owners.
To gain approval, the potential transferee must meet Counselor Realty's qualifications and satisfy the conditions outlined in the Franchise Agreement. These conditions include the transferee qualifying to operate the business, payment of a transfer fee, settling all outstanding amounts owed to Counselor Realty, and renovating the premises to meet the current system standards. Additionally, all shareholders or owners of the buyer must execute a guaranty.
The franchisee must apply for consent by providing written notice of the pending transfer, along with a complete application signed by both the franchisee and the proposed transferee, at least 60 days before the intended transfer date. A transfer fee of $2,000 is required, although this fee does not apply to transfers described in the second to last sentence of Section 9.1. Counselor Realty can withhold consent if the franchisee has outstanding payments to Counselor Realty or its affiliates, if the facility isn't upgraded to the current system standards, or if all shareholders/owners of the transferee don't execute the guaranty of the new agreement.
Counselor Realty also has the right of first refusal to match any offer for the franchisee's business. In the event of the death, disability, or incapacity of the franchisee, their executor, heir, successor, or legal representative must apply for Counselor Realty's consent to transfer the franchise within 60 days and comply with the transfer provisions of the Franchise Agreement.