What business experience, aptitude, and financial resources must the transferee possess to operate the Devon Creek Franchised Business?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
If Franchisee has complied fully with this Agreement and subject to Franchisor's Right of First Refusal set forth in Section 16.6, Franchisor will not unreasonably withhold its consent of a Transfer that meets the following requirements:
16.3.1 The proposed transferee and all its principals must have the demeanor and be individuals of good character and otherwise meet Franchisor's then-applicable standards for franchisees.
16.3.2 The transferee must have sufficient business experience, aptitude and financial resources to operate the Franchised Business and to comply with this Agreement;
16.3.3 The transferee has agreed to complete Franchisor's Initial Training Program to Franchisor's satisfaction;
16.3.4 Franchisee has paid all amounts owed to Franchisor and third-party creditors;
16.3.5 The transferee has executed Franchisor's then-standard form of Franchise Agreement, which may have terms and conditions different from this Agreement, except that the transferee shall not be required to pay the Initial Franchise Fee;
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, if a franchisee wishes to transfer their franchise to someone else, the proposed transferee must meet certain requirements. Specifically, the transferee and all their principals must demonstrate good character and meet Devon Creek's standards for franchisees at that time.
Critically, the transferee must possess sufficient business experience, aptitude, and financial resources to successfully operate the Devon Creek Franchised Business and adhere to the terms of the Franchise Agreement. This indicates that Devon Creek wants to ensure any new operator is well-equipped to handle the business's demands.
Furthermore, the transferee is required to complete Devon Creek's Initial Training Program to the franchisor's satisfaction. The transferee must also execute Devon Creek's then-standard form of Franchise Agreement, which may contain terms and conditions that differ from the original agreement. However, the transferee will not be required to pay the Initial Franchise Fee. Finally, the franchisee must have paid all outstanding amounts owed to Devon Creek and any third-party creditors before the transfer can be approved.