Under what circumstances is Counselor Realty's consent not required for a transfer of ownership interest?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
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, Counselor Realty's consent is not required for certain transfers of ownership interest within an existing franchisee entity. Specifically, this applies to transfers described in clause (iv) of Section 9.1's first sentence, which pertains to transfers of ownership interest in the franchisee entity or any owner of the franchisee.
However, this exception is conditional. Counselor Realty's consent is waived only if the transfer does not result in a change of control of the franchisee. Additionally, the franchisee must provide Counselor Realty with written notice of the transfer at least 30 days before it occurs, including any information Counselor Realty requires about the transfer and the transferee.
Finally, if the transfer involves an ownership interest in the franchisee, the transferee must execute and deliver a guaranty to Counselor Realty within 10 days of the transfer. These stipulations ensure that while minor ownership changes can occur without direct franchisor approval, Counselor Realty retains oversight regarding who is ultimately involved in the franchise and maintains the ability to enforce the franchise agreement.