What conditions must be met for Devon Creek Franchisor to not unreasonably withhold consent for a transfer?
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, a franchisee needs the franchisor's written consent to transfer their franchise. However, Devon Creek will not unreasonably withhold consent if certain conditions are met.
The proposed transferee must meet Devon Creek's standards for franchisees, including having the appropriate demeanor and good character. The transferee also needs sufficient business experience, aptitude, and financial resources to successfully operate the franchise and adhere to the franchise agreement.
Additionally, the transferee must complete Devon Creek's initial training program to the franchisor's satisfaction. The franchisee must have paid all outstanding amounts owed to Devon Creek and any third-party creditors. Finally, the transferee must execute Devon Creek's current standard franchise agreement, although they won't be required to pay the initial franchise fee.