What form of agreement must the transferee sign in a Counselor Realty franchise transfer?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
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 transferee must sign the then-current form of the Counselor Realty Franchise Agreement for the unexpired term of the franchise agreement. This requirement is in place unless the franchisee is an entity and the transfer involves an ownership interest in that entity or any owner of the franchisee.
This means that if you are selling your Counselor Realty franchise to someone else, the new franchisee will generally need to enter into a new franchise agreement with Counselor Realty. This agreement will last for the remainder of your original franchise term. The new agreement will ensure that the transferee is bound by the current terms and conditions of the Counselor Realty franchise system.
However, there is an exception. If the franchisee is a corporation, LLC, or other business entity, and the transfer involves the sale of stock or ownership interests in that entity, the transferee may not need to sign a new franchise agreement. In this case, the existing franchise agreement would remain in place, but the new owner(s) of the franchisee entity would be subject to its terms. Note that if the 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.
It is important to note that Counselor Realty must consent to any transfer of a franchise. Counselor Realty will assess whether the transferee is qualified to operate the business in compliance with the franchise agreement. Additionally, a transfer fee of $2,000 applies to all transfers, excluding transfers described in, and in accordance with, the second to last sentence of Section 9.1.