Is completion of a training program by the buyer a condition for Desi District's approval of a franchise transfer?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| j. Assignment of agreement by franchisor | FA: § 15.1 MUDA: § 7 | Unlimited |
| k. "Transfer" by FA: Article 1 franchisee - defined MUDA: Background Statement | For you (or any owner of your business) to voluntarily or involuntarily transfer, sell, or dispose of, in any single or series of transactions, (i) substantially all of the assets of the business, (ii) the franchise agreement, (iii) any direct or indirect ownership interest in the business, or (iv) control of the business. | |
| l. Franchisor's approval of transfer by franchisee | FA: § 15.2 MUDA: § 7 | No transfers without our approval. |
| m. Conditions for franchisor's approval of transfer | FA: § 15.2 MUDA: none | Pay transfer fee; buyer meets our standards; buyer is not a competitor of ours; buyer and its owners sign our then-current franchise agreement and related documents (including personal guaranty); you've made all payments to us and are in compliance with all contractual requirements; buyer completes training program; you sign a general release; business complies with then-current system specifications (including remodel, if applicable). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 44–48)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the completion of a training program by the buyer is indeed a condition for the franchisor's approval of a franchise transfer. Specifically, the FDD outlines several conditions that must be met for Desi District to approve the transfer of a franchise. These conditions ensure that the new franchisee is adequately prepared and meets the standards set by Desi District.
In addition to the buyer completing the training program, other conditions include paying a transfer fee, ensuring the buyer meets Desi District's standards and is not a competitor, having the buyer and their owners sign the then-current franchise agreement and related documents (including a personal guaranty), ensuring all payments to Desi District are made and all contractual requirements are met, the seller signing a general release, and ensuring the business complies with the then-current system specifications, including any required remodeling.
These requirements are typical in franchising, as franchisors want to ensure that any new franchisees are well-prepared to operate the business according to the established standards and procedures. This protects the brand and the interests of other franchisees within the Desi District system. A prospective franchisee should carefully review all these conditions and understand the obligations involved in transferring a Desi District franchise.