Does Counselor Realty require approval for all franchisee transfers?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
| | k. | "Transfer" by franchisee -- definition | Section 9.1 | Includes transfer of your interest in Franchise Agreement, the Office, Business or Business assets, or an interest in your business entity or your owners | | l. | Franchisor approval of transfer by franchisee | Section 9.1 | 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 | | m. | Conditions for franchisor approval of transfer | Sections 9.1, 9.2 | Transferee qualifies; payment of transfer fee; payment of all amounts owing; renovation to then-current System standards; execution of guaranty by buyer's shareholders or owners | | n. | Franchisor's right of first refusal to acquire franchisee's business | Section 9.6 | Counselor has the right of first refusal to match any offer for your Business |
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.
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 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 maintains the right to approve most franchisee transfers. A "transfer" includes transferring your interest in the Franchise Agreement, the Office, Business, or Business assets, or an interest in your business entity or your owners. Counselor Realty's consent is required for all transfers unless it is a transfer of less than a majority interest in your business entity or your owners.
Counselor Realty will grant consent to a transfer if the conditions specified in the Franchise Agreement are satisfied and the transferee is qualified to operate the Business in compliance with the Franchise Agreement. The prospective transferee must meet Counselor Realty's qualifications, pay a transfer fee, settle all outstanding debts, renovate the premises to meet current system standards, and ensure that the buyer's shareholders or owners execute a guaranty.
However, Counselor Realty's consent is not required if the transfer does not result in a change of control of the franchisee, the franchisee provides written notice to Counselor Realty 30 days prior to the transfer, and if the transfer is of an ownership interest, the transferee executes and delivers a guaranty to Counselor Realty within 10 days of the transfer. Counselor Realty also retains the right of first refusal to match any offer for the franchisee's business.