Must a transfer after death or incapacity of a Desi District franchisee comply with Section 15.2?

According to Desi District's 2024 Franchise Disclosure Document, a transfer of the franchise upon the death or incapacity of the franchisee must comply with Section 15.2 of the franchise agreement. This means that the executor, administrator, or personal representative of the deceased or incapacitated franchisee must transfer the business to a third party approved by Desi District (or to another existing owner) within nine months. This transfer is not exempt from the standard transfer requirements outlined in Section 15.2.

Section 15.2 specifies that the franchisee must provide Desi District with at least 60 days' notice of the proposed transfer and obtain Desi District's consent. Desi District may impose several conditions for granting consent. These conditions include paying a transfer fee of $10,000 plus any broker fees and out-of-pocket costs incurred by Desi District.

Additionally, the proposed assignee must complete Desi District's franchise application process, meet the then-current standards for new franchisees, and be approved by Desi District. The assignee must not be a competitor and must execute Desi District's current form of franchise agreement, which may contain materially different provisions. All owners of the proposed assignee must provide a guaranty, and the franchisee must have paid all monetary obligations to Desi District and its affiliates. The franchisee must also not be in default or breach of the agreement, and the business must fully comply with Desi District's most recent System Standards. The proposed assignee and its owners and employees must also undergo any required training, and both the franchisee and the transferee must execute a general release of Desi District.