Does the Deck Medic franchisor's definition of 'transfer' include involuntary transfers?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
statement or omission in questionnaires submitted to us; the
| k. | "Transfer" by franchisee definition | 14.B. | A transfer means and includes, whether voluntary or involuntary, conditional or unconditional, direct or indirect: (a) an assignment, sale, gift, transfer, pledge or sub franchise; (b) the grant of a mortgage, charge, lien or security interest, including, without limitation, the grant of a collateral assignment; (c) a merger, consolidation, exchange of shares or other ownership interests, issuance of additional ownership interests or securities representing or potentially representing ownership interests, or redemption of ownership interests; and (d) a sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any holder of ownership interests or to control the operations or affairs of Franchisee. |
|---|---|---|---|
| l. | Franchisor's approval of transfer by franchisee | 14.B. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 34–39)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, the definition of 'transfer' includes both voluntary and involuntary actions. This is important for prospective franchisees to understand because any change in ownership, control, or even the structure of the business can be considered a transfer, regardless of whether the franchisee initiates it willingly.
The FDD specifies that a transfer includes assignments, sales, gifts, pledges, sub-franchises, mortgages, liens, security interests, mergers, consolidations, exchanges of shares, issuance of additional ownership interests, redemption of ownership interests, and sales or exchanges of voting interests. This broad definition ensures that Deck Medic retains control over who operates its franchises and that any change is subject to their approval.
Deck Medic requires prior written consent for any transfer, which they may grant or withhold at their discretion. This provision gives Deck Medic significant control over the future ownership and management of each franchise. A franchisee looking to sell or transfer their business needs to be aware of these conditions and the franchisor's right to approve or deny the transfer. This also has implications for estate planning and business succession, as the franchisee's heirs or representatives will need to comply with these transfer provisions.