What is the definition of 'Business' in the context of Counselor Realty transfer restrictions?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, the term 'Business' in the context of transfer restrictions relates to the franchisee's operations and assets. Specifically, transfer restrictions apply if a franchisee intends to change the ownership or control of their interest in the Franchise Agreement, the Office, any Additional Office, any Extension Office, or the Business itself. These restrictions also apply to a majority of the assets of the Office, any Additional Office, any Extension Office, or the Business.
For a prospective Counselor Realty franchisee, this means that any significant change in ownership or control of the franchise requires adherence to the transfer provisions outlined in the Franchise Agreement. This includes offering Counselor Realty the right of first refusal to acquire the franchise and obtaining Counselor Realty's consent for the transfer. The definition of 'Business' is therefore crucial because it establishes the scope of assets and interests subject to these transfer restrictions.
It is important to note that Counselor Realty's consent is not required for certain transfers if the transfer will not result in a change of control of the franchisee, the franchisee provides Counselor Realty with written notice of the transfer at least 30 days prior to the transfer, and if the transfer is a transfer of an ownership interest in the franchisee, the transferee executes the guaranty attached to the agreement and delivers it to Counselor Realty within 10 days of the transfer. Understanding these conditions and exceptions is essential for franchisees planning any changes to their ownership structure or business operations.