What happens to the Creative World School franchise agreement if Creative World School transfers it?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
• If Franchisee is proposing to transfer a partial interest in Franchisee and Franchisor has an option to purchase or a right of first refusal with respect to that partial interest, Franchisor may exercise such option or right only if the proposed transferee is not a current owner or family member of a current owner of Franchisee. If the Franchisor's consent is required for any transfer (full or partial), Franchisor will not unreasonably withhold such consent. In the event of an approved transfer of the franchise interest or any portion thereof, the transferor will not be liable for the actions of the transferee franchisee.
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
The 2025 Creative World School Franchise Disclosure Document (FDD) addresses the transfer of franchise interests. Specifically, if a franchisee proposes to transfer a partial interest in their franchise, Creative World School retains the option to purchase or a right of first refusal, but only if the proposed transferee is not a current owner or a family member of a current owner of the franchise.
Furthermore, if Creative World School's consent is required for any transfer, whether full or partial, the FDD states that Creative World School will not unreasonably withhold such consent. This implies that there are conditions under which the franchisor's consent is necessary for a transfer to proceed.
In the event that a transfer of the franchise interest, or any portion thereof, is approved, the transferor (the original franchisee) will not be held liable for the actions of the transferee (the new franchisee). This provision protects the original franchisee from liabilities arising from the new franchisee's operation of the Creative World School franchise after the transfer is complete.