What does the term 'transfer' mean in the Craters & Freighters Franchise Agreement?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon death or permanent disability of Franchisee or a principal owner of Franchisee, the executor, administrator, conservator, guardian, or other personal representative of such person must transfer its interest in this Agreement or such interest in Franchisee to a third party approved by Franchisor. Such disposition of this Agreement or such interest (including, without limitation, transfer by bequest or inheritance) (collectively, "Disposition") must be completed within a reasonable time, not to exceed six (6) months from the date of death or permanent disability ("Disposition Deadline"), and will be subject to all of the terms and conditions applicable to transfers contained in Section 16 of this Agreement including, but not limited to Franchisor's right of first refusal; provided, however, in the event the Disposition has not been completed before the Disposition Deadline because the estate of Franchisee (or a principal owner of Franchisee, as the case may be) has not yet been concluded in probate court, then the Disposition Deadline will be extended until such time that such probate court has completed the probate process, not to exceed a total of twelve (12) months from the date of death or permanent disability. For purposes hereof, the term "permanent disability" will mean a mental or physical disability, impairment, or condition that is reasonably expected to prevent or actually does prevent Franchisee or an owner of a controlling interest in Franchisee from supervising the management and operation of the Franchised Business for a period of six (6) months or more from the onset of such disability, impairment, or condition.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, the term 'transfer' is specifically defined within the context of the death or permanent disability of the franchisee or a principal owner. In such cases, the executor, administrator, conservator, guardian, or other personal representative is required to transfer the interest in the Franchise Agreement to a third party approved by Craters & Freighters. This transfer encompasses any disposition of the agreement or interest, including transfers by bequest or inheritance.
The transfer must be completed within a reasonable timeframe, not exceeding six months from the date of death or permanent disability. However, an extension may be granted if the estate is still in probate court, extending the deadline to a maximum of twelve months from the date of death or permanent disability. This provision ensures that the Craters & Freighters franchise continues to operate under approved management even in unforeseen circumstances.
The transfer is subject to all terms and conditions outlined in Section 16 of the Franchise Agreement, including Craters & Freighters' right of first refusal. This means that Craters & Freighters has the first option to purchase the franchise before it is offered to a third party. The term 'permanent disability' is defined as a mental or physical condition that prevents the franchisee or a controlling owner from supervising the business for at least six months. This definition clarifies the circumstances under which the transfer provision is activated due to disability.