Is Franchisee consent required for a Transfer of a Crown Gold Exchange franchise?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
TRANSFERS**
- 15.1 By Crown Gold Franchising. Crown Gold Franchising may transfer or assign this Agreement, or any of its rights or obligations under this Agreement, to any person or entity, and Crown Gold Franchising may undergo a change in ownership and/or control, without the consent of Franchisee.
- 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that Crown Gold Franchising entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing Crown Gold Franchising at least 60 days prior notice of the proposed Transfer, and without obtaining Crown Gold Franchising's consent. In granting any such consent, Crown Gold Franchising may impose conditions, including, without limitation, the following:
- (i) Crown Gold Franchising receives a transfer fee equal to $10,000 plus any broker fees and other out-of-pocket costs incurred by Crown Gold Franchising;
- (ii) the proposed assignee and its owners have completed Crown Gold Franchising's franchise application processes, meet Crown Gold Franchising's then-applicable standards for new franchisees, and have been approved by Crown Gold Franchising as franchisees;
- (iii) the proposed assignee is not a Competitor;
- (iv) the proposed assignee executes Crown Gold Franchising's then-current form of franchise agreement and any related documents, which form may contain materially different provisions than this Agreement (provided, however, that the proposed assignee will not be required to pay an initial franchise fee);
- (v) all owners of the proposed assignee provide a guaranty in accordance with Section 2.5;
- (vi) Franchisee has paid all monetary obligations to Crown Gold Franchising and its affiliates, and to any lessor, vendor, supplier, or lender to the Business, and Franchisee is not otherwise in default or breach of this Agreement or of any other obligation owed to Crown Gold Franchising or its affiliates;
- (vii) the proposed assignee and its owners and employees undergo such training as Cro
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, franchisees must obtain the franchisor's consent to transfer their franchise. Crown Gold Franchising acknowledges that the agreement is personal to the franchisee and relies on the franchisee's skills and abilities.
To transfer a franchise, a franchisee must provide Crown Gold Franchising with at least 60 days' prior notice and obtain their consent. Crown Gold Franchising may impose conditions on the transfer, including a transfer fee of $10,000 plus broker fees and out-of-pocket costs. The proposed assignee must also meet Crown Gold Franchising's standards for new franchisees and not be a competitor.
Additionally, the assignee must execute Crown Gold Franchising's current franchise agreement, which may have materially different provisions, although they won't have to pay an initial franchise fee. All owners of the assignee must provide a guaranty, and the franchisee must have paid all obligations to Crown Gold Franchising and its affiliates. The assignee and its owners and employees must also undergo any required training, and both the franchisee and transferee must execute a general release of Crown Gold Franchising. Finally, the business must comply with all of Crown Gold Franchising's most recent System Standards.