What happens upon the death or incapacity of a Crown Gold Exchange franchisee?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.4 Transfer upon Death or Incapacity. Upon the death or incapacity of Franchisee (or, if Franchisee is an entity, the Owner with the largest ownership interest in Franchisee), the executor, administrator, or personal representative of that person must Transfer the Business to a third party approved by Crown Gold Franchising (or to another person who was an Owner at the time of death or incapacity of the largest Owner) within nine months after death or incapacity.
Such transfer must comply with Section 15.2.
- 15.5 Crown Gold Franchising's Right of First Refusal. Before Franchisee (or any Owner) engages in a Transfer (except under Section 15.3, to a co-Owner, or to a spouse, sibling, or child of an Owner), Crown Gold Franchising will have a right of first refusal, as set forth in this Section.
Franchisee (or its Owners) shall provide to Crown Gold Franchising a copy of the terms and conditions of any Transfer.
For a period of 30 days from the date of Crown Gold Franchising's receipt of such copy, Crown Gold Franchising will have the right, exercisable by notice to Franchisee, to purchase the assets subject of the proposed Transfer for the same price and on the same terms and conditions (except that Crown Gold Franchising may substitute cash for any other form of payment).
If Crown Gold Franchising does not exercise its right of first refusal, Franchisee may proceed with the Transfer, subject to the other terms and conditions of this Article.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, in the event of the death or incapacity of a franchisee, or the owner with the largest ownership interest if the franchisee is an entity, their executor, administrator, or personal representative is required to transfer the Crown Gold Exchange business within nine months. This transfer must be approved by Crown Gold Franchising, unless the transfer is to another person who was already an owner at the time of death or incapacity.
Crown Gold Franchising also retains a right of first refusal on any such transfer. Before the transfer can proceed, the franchisee (or their owners) must provide Crown Gold Franchising with a copy of the proposed transfer terms. Crown Gold Franchising then has 30 days to decide whether to purchase the assets of the business under the same terms, with the option to substitute cash for other forms of payment.
If Crown Gold Franchising waives its right of first refusal, the franchisee may proceed with the transfer, subject to all other terms and conditions outlined in the franchise agreement. This ensures that Crown Gold Exchange maintains control over who operates a franchise within their system, even in unforeseen circumstances such as death or incapacity. This is a fairly standard clause in franchise agreements to ensure brand consistency and operational standards are maintained.