What conditions must a Counselor Realty transferee meet to be approved?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
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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.
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, a franchisee needs to meet certain conditions for a transfer of their franchise to be approved. The franchisee must first offer Counselor Realty the right of first refusal to acquire the franchise agreement. If Counselor Realty waives this right, the franchisee can proceed with the transfer, but only with Counselor Realty's consent and after satisfying specific conditions.
The franchisee and the proposed transferee must adhere to the procedures outlined in Section 9.2 of the franchise agreement. The transferee is required to sign the then-current form of the Counselor Realty Franchise Agreement for the remaining term, unless the transfer involves ownership interest within an existing franchisee entity. Counselor Realty will grant consent to the transfer if the conditions specified in the agreement are met and if Counselor Realty believes the transferee is qualified to operate the business in accordance with the agreement.
Counselor Realty may withhold consent if the franchisee has outstanding debts to Counselor Realty or its affiliates, or to their suppliers. Consent may also be withheld if required repairs, maintenance, or upgrades to the business's facilities, fixtures, equipment, and signage to meet the current system standards are not completed. Additionally, all shareholders or owners of the transferee entity must execute the guaranty of the new agreement. The transferee must apply for consent by submitting written notice of the pending transfer, along with a complete application signed by both parties, and payment of a $2,000 transfer fee, at least 60 days before the proposed transfer date. However, the transfer fee does not apply to transfers described in the second to last sentence of Section 9.1.