Under what conditions can Dog Haus refuse to permit a transfer of ownership of a franchise in Michigan?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
MICHIGAN ADDENDUM TO DISCLOSURE DOCUMENT
The following disclosures are required by the State of Michigan:
- THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
Each of the following provisions is void and unenforceable if contained in any documents related to a franchise:
- B.
A requirement that a franchisee assent to a release, assignment, novation, waiver or estoppel which deprives a franchisee of rights and protections provided in the Michigan Franchise Investment Act.
This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.
- C.
A provision that permits a franchisor to terminate a franchise prior to the expiration of this term except for good cause.
Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice and a reasonable opportunity, which will not be more than 30 days, to cure such failure.
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, specifically the Michigan addendum, there are certain provisions that, if included in the franchise documents, are void and cannot be enforced against a franchisee in Michigan. This provides some protection to franchisees in the state regarding the transfer of ownership and other aspects of the franchise agreement.
One key provision that Dog Haus cannot enforce in Michigan is a requirement that a franchisee assent to a release, assignment, novation, waiver, or estoppel that deprives them of rights and protections under the Michigan Franchise Investment Act. This means Dog Haus cannot force a franchisee to give up their legal rights when transferring ownership. However, the addendum clarifies that a franchisee can still settle claims after entering into the franchise agreement.
Another unenforceable provision is one that allows Dog Haus to terminate a franchise before its term expires without good cause. Good cause is defined as the franchisee's failure to comply with a lawful provision of the franchise agreement, and even then, the franchisee must be given written notice and a reasonable opportunity (not more than 30 days) to correct the failure. This implies that Dog Haus cannot arbitrarily deny a transfer of ownership by terminating the franchise without proper justification and due process.
These protections afforded by Michigan law ensure that Dog Haus franchisees are not subjected to unfair or overbearing terms in the franchise agreement, particularly concerning their rights during a transfer of ownership. Prospective franchisees in Michigan should carefully review the franchise documents and be aware of these state-specific protections.