Are transfers of a Devon Creek franchise by devise or inheritance subject to the conditions for transfers?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
- capacity of Franchisee.
Thus, no transfer, as hereafter defined, may be made without Franchisor's prior written approval.
Franchisor may void any transfer made without such approval.
- 16.3 Transfers by Franchisee.
Franchisee shall not directly or indirectly sell, assign, transfer, give, devise, convey or encumber this Agreement or any right or interest herein or hereunder (a "Transfer"), the Franchise, the Franchised Business or any assets thereof (except in the ordinary course of business) or suffer or permit any such assignment, transfer, or encumbrance to occur by operation of law unless it first obtains the written consent of Franchisor.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to the 2024 Devon Creek Franchise Disclosure Document, transfers of the franchise agreement or any interest in it, including by devise, are subject to the franchisor's written consent. Specifically, the FDD states that a franchisee cannot directly or indirectly transfer the agreement or any rights without first obtaining written consent from Devon Creek. Devon Creek may void any transfer made without their approval.
This means that if a Devon Creek franchisee wishes to transfer their franchise to someone through a will or inheritance, they must first get approval from Devon Creek. This requirement allows Devon Creek to ensure that the person inheriting the franchise meets their standards for franchisees. These standards include having good character, sufficient business experience, and the financial resources to operate the franchise.
Devon Creek also requires that the transferee complete the initial training program and execute the then-standard form of the Franchise Agreement. However, the transferee is not required to pay the Initial Franchise Fee. This ensures that the new franchisee is properly trained and agrees to the current terms of the franchise agreement. The franchisor also has the right of first refusal, meaning they have the first opportunity to purchase the franchise before it is transferred to someone else.