Does Counselor Realty have to deem the transferee qualified to approve a transfer?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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.
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.
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, Counselor Realty does have to deem the transferee qualified in order to approve a transfer. Specifically, Counselor Realty has the right to consent to all transfers, with some exceptions for minority interest transfers within a franchisee's business entity. Counselor Realty will grant consent if it believes the potential transferee is qualified and all other conditions in the Franchise Agreement are met.
This means that if a franchisee wants to sell their Counselor Realty franchise, the person or entity buying it must meet Counselor Realty's standards for operating the business. Counselor Realty's judgment about the transferee's qualifications is a key factor in whether the transfer will be approved. This protects the Counselor Realty brand by ensuring that new franchisees are capable of maintaining the company's standards.
In addition to being deemed qualified, the potential transferee will also need to adhere to the transfer conditions outlined in Sections 9.1 and 9.2 of the franchise agreement. The transferee must also sign the current Counselor Realty Franchise Agreement for the unexpired term. The franchisee must apply for consent with a written notice, a complete application signed by both parties, and payment of a $2,000 transfer fee, at least 60 days before the proposed transfer date. Counselor Realty may withhold consent if the franchisee has outstanding debts, if upgrades to the facility are not completed, or if all shareholders/owners of the transferee do not execute the guaranty of the new agreement.