Can Crisp & Green disapprove a transfer based on the terms of payment?

According to Crisp & Green's 2024 Franchise Disclosure Document, Crisp & Green can disapprove a transfer if the terms of payment are too burdensome. Specifically, Crisp & Green must not have disapproved the material terms and conditions of such transfer (including the price and terms of payment) on the basis that they are so burdensome as to be likely, in their judgment, to adversely affect the transferee's operation of the Franchised Restaurant or its compliance with its franchise agreements and any development agreements.

This means that Crisp & Green has the right to assess the financial viability of a proposed transfer. If the franchisor believes that the financial terms agreed upon between the seller and the buyer of the franchise are likely to cause the new franchisee to struggle financially or be unable to meet their obligations under the franchise agreement, Crisp & Green can disapprove the transfer. This protects the Crisp & Green brand by ensuring that new franchisees are set up for success.

Furthermore, if the seller of the Crisp & Green franchise finances any portion of the sale, the seller must agree that their security interests are subordinate to the new franchisee's obligations to Crisp & Green. This ensures that Crisp & Green's financial interests are prioritized over those of the seller in the event of financial difficulties. This is a fairly standard practice in franchising, as franchisors want to ensure their royalties and other fees are paid before other debts.