Under what conditions can Crepe De Licious withhold consent to a transfer?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
first obtained will be null and void, and shall be a material default of this Agreement. In that event: we may terminate this Agreement under Section 16.01; you will remain responsible for performing the post-termination obligations in Section 17; and the purported transferee may not operate the Franchised Business under the Marks or the System.
15.03 Transfer Conditions. We may, to the extent permitted by applicable law, condition and withhold our consent to a Transfer, when required under Section 15.02 until the transferee and you meet certain conditions. If a Transfer is to occur: (a) the proposed transferee must apply for a Crepe de licious franchise and must meet all of our then-current standards and requirements for becoming a Crepe de licious franchisee, in our sole discretion; (b) you or the proposed transferee must provide to us in writing the circumstances of the proposed Transfer; (c) the proposed transferee must provide to us the same supporting documents as a new franchise applicant; (d) you or the proposed transferee must pay us a transfer fee of $10,000 ($5,000 if the proposed transferee is an existing Crepe de licious franchisee), including a non-refundable $1,000 deposit that is due upon the request for approval of a Transfer (e) the proposed transferee must sign the form of franchise agreement and related documents we then offer to prospective franchisees, which agreement will provide for a new initial term of five (5) years, and the transferee's owners will sign the form of owners agreement or guaranty we then require of franchisees' owners; (f) the proposed transferee and its designated manager must complete to our satisfaction the initial training then required for new franchisees and their designated managers; (g) you or the proposed transferee must refurbish the Restaurant, Kiosk, or Food Truck to conform to our then-current standards and specifications; (h) we must receive general releases from you and each of your owners, and payment of all amounts then owed to us and our affiliates by you and your owners and affiliates, and the transferee and its owners and affiliates, under this Agreement or otherwise; (i) you must not be in default under this Agreement or any other agreement with us or any of our affiliates; (j) you must give us at least 30 days' prior written notice of any proposed Transfer; (k) you must reimburse us upon receipt of our invoice for any broker or other placement fees we incur as a result of the transfer; (l) the Restaurant, Kiosk, or Food Truck must be in operation for at least one (1) year, if we have not exercised right of first refusal; (m) the proposed transferee must have sufficient business experience and financial resources to operate the Franchise; (n) your landlord must consent to transfer the lease to the proposed transferee; (o) you must sign a non-compete agreement not to engage in a competitive business for two (2) years within: (i) a 25 mile
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious Franchise Disclosure Document, Crepe De Licious may withhold consent to a franchise transfer if certain conditions are not met by the franchisee and the proposed transferee. These conditions are extensive and cover various aspects of the transfer process, ensuring that any new franchisee meets Crepe De Licious's standards and that the transfer does not negatively impact the brand.
Specifically, the proposed transferee must apply for a Crepe De Licious franchise and meet all of the then-current requirements for new franchisees, as determined solely by Crepe De Licious. The current franchisee or the proposed transferee must provide written details about the transfer, and the transferee must submit the same supporting documents required of a new applicant. A transfer fee of $10,000 is required ($5,000 if the transferee is an existing franchisee), which includes a non-refundable $1,000 deposit due upon requesting transfer approval. The transferee must also sign the current franchise agreement, which will have a new initial term of five years, and their owners must sign the required owners' agreement or guaranty.
Additionally, the proposed transferee and their designated manager must complete the initial training program to Crepe De Licious's satisfaction. The restaurant, kiosk, or food truck must be refurbished to meet the current brand standards. Crepe De Licious requires general releases from the current franchisee and their owners, along with the payment of all outstanding amounts owed by them and the transferee. The current franchisee must not be in default of any agreements with Crepe De Licious, and must provide at least 30 days' prior written notice of the proposed transfer. The restaurant must have been in operation for at least one year, assuming Crepe De Licious has not exercised its right of first refusal. The proposed transferee must demonstrate sufficient business experience and financial resources, and the landlord must consent to the lease transfer. The current franchisee must sign a non-compete agreement for two years within a 25-mile radius of both the transferred location and any other Crepe De Licious businesses. Finally, Crepe De Licious may request any additional information it reasonably deems necessary.
These conditions are typical in franchising to ensure brand consistency and protect the franchisor's interests. The extensive list of requirements ensures that any new franchisee is well-qualified and committed to upholding Crepe De Licious's standards. Franchisees looking to transfer their business should be aware of these conditions and prepared to meet them to facilitate a smooth transfer process.