What is the required notice period before a Crown Gold Exchange Franchisee can conduct a Transfer?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
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;
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, a franchisee must provide at least 60 days prior notice to Crown Gold Exchange before undergoing a transfer. This requirement allows Crown Gold Exchange to assess the proposed transfer and ensure it aligns with their standards and policies.
Crown Gold Exchange also has the right to impose conditions on the transfer, including receiving a transfer fee of $10,000 plus any broker fees and out-of-pocket costs they incur. They will also evaluate the proposed assignee to ensure they meet the current standards for new franchisees and are not a competitor. The assignee must complete the franchise application process and execute the current franchise agreement, though they are not required to pay an initial franchise fee.
Additionally, Crown Gold Exchange has a right of first refusal, allowing them to purchase the assets of the franchise under the same terms offered to a third party. This clause does not apply to transfers to a co-owner, spouse, sibling, or child of an owner, or transfers for convenience of ownership. These stipulations ensure Crown Gold Exchange maintains control over who operates franchises under their brand and protects their interests during ownership changes.