Where in the Ella Cafe franchise agreement can I find information about the process for transferring my franchise?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
rks, the System, and/or the loss of association with or identification of Ella Coffee Company, LLC as the franchisor under this Agreement. Franchisor's assignment or transfer of its rights and obligations under this Agreement pursuant to this Section 15.1. to any party may be without Franchisee's approval or prior notice to Franchisee, provided that the buyer, assignee or transferee agrees in writing to assume all of Franchisor's obligations under this Agreement. Franchisor and its Indemnitees will not be liable for obligations of the transferee arising after the date of transfer.
- 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that Franchisor entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing Franchisor at least 60 days prior notice of the proposed Transfer, and without obtaining Franchisor' consent. In granting any such consent, Franchisor may impose conditions, including, without limitation, the following:
- (i) Franchisor receives a transfer fee of $10,000 ("Transfer Fee") plus any broker fees and other out-of-pocket costs incurred by Franchisor, including attorneys' fees
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, Section 15.2 of Item 22 within the franchise agreement details the process for transferring a franchise. The agreement emphasizes that the rights and duties are personal to the franchisee, and Ella Cafe relies on the franchisee's skills and abilities.
To transfer the franchise, a franchisee must provide Ella Cafe with at least 60 days' prior notice and obtain their consent. Ella Cafe may impose conditions for granting consent, including a transfer fee of $10,000, plus any broker fees and out-of-pocket costs, including attorney's fees.
Additionally, the proposed assignee must complete Ella Cafe's franchise application process, meet the then-applicable standards for new franchisees, and be approved by Ella Cafe. The assignee must not be a competitor and must execute Ella Cafe's current form of franchise agreement, which may contain materially different provisions. All owners of the proposed assignee must also provide a guaranty.
This level of detail is typical for franchise agreements, as the franchisor wants to ensure that any new franchisee meets their standards and is capable of maintaining the brand's reputation. The transfer fee compensates Ella Cafe for their time and expenses in approving the transfer and training the new franchisee.