What transfers are exceptions to Desi District Franchise Group's right of first refusal?

According to Desi District's 2024 Franchise Disclosure Document, Desi District Franchise Group has the right of first refusal before a franchisee engages in a transfer. However, there are exceptions to this rule. Desi District will not have the right of first refusal in the event of a transfer under Section 15.3, to a co-owner, or to a spouse, sibling, or child of an owner.

Section 15.3 refers to a transfer for convenience of ownership. This occurs when a franchisee, who is an individual, transfers the agreement to a corporation or limited liability company formed for ownership convenience. This is permissible after giving Desi District at least 15 days' notice, provided that the transferee provides the necessary information, the franchisee owns all voting securities of the entity, and the franchisee provides a guaranty.

This right of first refusal allows Desi District to maintain control over who becomes a franchisee and ensures that new franchisees meet their standards. However, the exceptions allow for flexibility in ownership structure and succession within a family or among co-owners without requiring the franchisor's intervention. A prospective franchisee should consider these transfer conditions carefully, as they can impact the future sale or transfer of the franchise.