Can a Counselor Realty franchisee delegate any of the rights licensed by the agreement?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
2.2 Acknowledgments. This Agreement is subject to the following conditions:
(a) The Business shall offer and provide only the services, and be identified only by Marks, we authorize;
(b) The Marks are our exclusive and valuable property. You have no right, ownership or other interest in or to any of the Marks except the qualified license to use them in strict conformity with this Agreement;
(c) We may change the System and the Marks periodically, and when we do, you must promptly conform the Business to the revised requirements, at your cost;
(d) You shall not directly or indirectly sublicense, delegate or transfer any of the rights licensed by this Agreement except in accordance with Article 9;
(e) We and our affiliates may conduct various business activities, including residential and commercial real estate brokerage businesses; and
(f) You acknowledge that the System was developed by us at considerable expense and investment and that your operation of a "Counselor" franchise is possible only with our assistance and ongoing advisory services. You agree that the disclosure or unauthorized or improper use of the System may cause Counselor or other franchisees irreparable harm, and you agree not to engage in such practices.
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, franchisees are generally prohibited from sublicensing, delegating, or transferring any rights granted by the franchise agreement. However, there is an exception to this rule, as these rights can be transferred in accordance with Article 9 of the agreement.
Specifically, Article 9 outlines the conditions and procedures for transferring the franchise. This includes the franchisee first offering Counselor Realty the right of first refusal to acquire the agreement or assets. If Counselor Realty declines, the transfer can proceed with their consent, provided the transferee meets the franchisor's qualifications and signs the current franchise agreement.
This restriction on delegation and transfer is typical in franchising, as it allows Counselor Realty to maintain control over who operates under their brand and ensures consistent standards across all franchise locations. Prospective franchisees should carefully review Article 9 to understand the specific requirements and limitations on transferring their franchise rights.