Within what timeframe must the interest of a deceased Ella Cafe Developer be transferred to a third party?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Upon the death of Developer (if Developer is a natural person) or any Owner who is a natural person ("Deceased"), the executor, administrator, or other personal representative of the Deceased must transfer such interest to a third party approved by Franchisor within six months after the date of death.
If no personal representative is designated or appointed or no probate proceedings are instituted with respect to the estate of the Deceased, then the distributee of such interest must be approved by Franchisor.
If the distributee is not approved by Franchisor, then the distributee must transfer such interest to a third party approved by Franchisor within six months after the death of the Deceased.
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, if a Developer or Owner of the franchise passes away, their interest in the franchise must be transferred to a third party approved by Ella Cafe within six months of the date of death. This requirement applies whether the deceased is the Developer themselves or an Owner of the Business Entity holding the development rights.
If no personal representative is designated or probate proceedings are not initiated for the deceased's estate, the distributee of the interest must be approved by Ella Cafe. Should the distributee not receive approval from Ella Cafe, they are then obligated to transfer the interest to an Ella Cafe-approved third party, also within six months of the date of death.
This provision ensures that Ella Cafe maintains control over who becomes a Developer within their system, even in the event of death. It also places a responsibility on the estate or beneficiaries of the deceased to act quickly to either gain approval from Ella Cafe or find an alternative, approved buyer for the franchise interest. Prospective franchisees should consider this timeframe and the potential complexities of estate administration when evaluating the franchise opportunity.