Under what conditions can Crown Gold Exchange withhold consent to the transfer of a franchise in Minnesota?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
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 the 2024 Crown Gold Exchange Franchise Disclosure Document, Crown Gold Franchising can impose conditions when granting consent for a franchise transfer. These conditions include receiving a transfer fee of $10,000 plus any broker fees and out-of-pocket costs incurred by Crown Gold Franchising.
Additionally, the proposed assignee and their owners must complete Crown Gold Franchising's franchise application processes, meet the then-applicable standards for new franchisees, and be approved by Crown Gold Franchising as franchisees. This ensures that any new franchisee meets the standards and qualifications set by Crown Gold Exchange.
Furthermore, the proposed assignee must not be a competitor of Crown Gold Exchange. The proposed assignee must also execute Crown Gold Franchising's then-current form of franchise agreement and any related documents, which may contain materially different provisions than the original agreement. However, the proposed assignee will not be required to pay an initial franchise fee. These conditions allow Crown Gold Exchange to maintain control over who becomes a franchisee and to protect its brand and business interests.