What are the conditions for Desi District franchisor's approval of a transfer by a franchisee?
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 a |
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, a franchisee cannot transfer their franchise without the franchisor's approval. The conditions for Desi District's approval include several requirements that both the franchisee and the buyer must meet.
First, the franchisee must pay a transfer fee and ensure all payments to Desi District are up to date, and they must be in compliance with all contractual requirements. Second, the buyer must meet Desi District's standards and not be a competitor. The buyer and their owners are required to sign the then-current franchise agreement and related documents, including a personal guaranty.
Additionally, the buyer must complete the training program that Desi District requires. The franchisee must sign a general release, which typically releases Desi District from any claims related to the franchise. Finally, the business must comply with the then-current system specifications, which may include remodeling if applicable. These conditions ensure that any transfer maintains the standards and integrity of the Desi District franchise system.