Is a transfer of interest in the Craters & Freighters Franchise Agreement due to death considered a 'transfer'?
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.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, a transfer of interest in the Franchise Agreement due to death is considered a 'transfer.' Specifically, upon the death of the franchisee or a principal owner, their representative must transfer the interest in the agreement to a third party approved by Craters & Freighters. This transfer, which includes transfer by bequest or inheritance, is termed a 'Disposition.'
The 'Disposition' must be completed within six months from the date of death or permanent disability. However, Craters & Freighters may extend this deadline up to twelve months if the estate is still in probate court. This disposition is subject to all terms and conditions applicable to transfers, including Craters & Freighters' right of first refusal.
This means that if a Craters & Freighters franchisee passes away, their heirs or estate will need to find a buyer for the franchise, and Craters & Freighters has the right to buy the franchise themselves before it is offered to another party. The potential buyer must also be approved by Craters & Freighters. This process ensures that Craters & Freighters maintains control over who operates their franchises, even in the event of the franchisee's death or disability.