If an Engineering For Kids franchisee transfers their franchise, must the transferee not be in default?

Question

Accepted Answer

|  | Provision | Section in | Summary * |
|---|---|---|---|
|  |  | Franchise or other Agreement |  |
| c Requirements for you to renew or extend | 2.2 |  | Notice, satisfaction of monetary obligations, compliance with Franchise Agreement, not in material default, release, sign then-current form of Franchise Agreement (which may contain materially different terms and conditions than the original agreement), pay a renewal fee, and others; please refer to §§ 2.2.1 –2.2.7 in the Franchise Agreement. |
| d Termination by you | Not applicable |  | Subject to state law, you may not terminate the Franchise Agreement. |
| e Termination by us | Not applicable |  |  |
| without cause |  |  |  |
| f Termination by us with cause | 15 |  | Default under agreement, bankruptcy, abandonment, and other grounds; see § 15 of the Franchise Agreement. (Under the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., we may be unable to terminate the agreement merely because you make a bankruptcy filing.) |
| g “Cause” defined – | 15.3 |  | All other defaults not specified in §§ 15.1 and |
| curable defaults |  |  | 15.2 of the Franchise Agreement |
| h “Cause” defined – non-curable defaults | 15.1 and 15.2 |  | Bankruptcy, abandonment, conviction of felony, and others (but under the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., we may be unable to terminate the agreement merely because you make a bankruptcy filing). |
| i Your obligations on termination/ nonrenewal | 16 |  | Immediately stop operating the Franchised Business, stop all use of our trademarks, pay all amounts due, pay liquidated damages if termination was due to your default, and others; see §§ 16.1.1 – 16.1.4 of the Franchise Agreement. |
| j Assignment of | 13 |  | There are no limits on our right to assign the |
| contract by us |  |  | Franchise Agreement. |
| k “Transfer” by you – | 14.1 |  | Includes transfer of any interest. |
| defined |  |  |  |
| l Our approval of | 14.2 |  | We have the right to approve transfers. |
| transfer by you |  |  |  |
| m Conditions for our approval of transfer | 14.3 |  | Release, signature of new agreement, payment of transfer fee, meet then-current qualifications to our satisfaction, successfully complete training requirements and pay training fee, arrange to upgrade and conform Franchised |
|  | Provision | Section in Franchise or other Agreement | Summary * Business to then-current standards and specifications, sign our then-current form of personal guarantee; transferee must not be in default, and prices and other proposed terms of transfer must not have effect of negatively impacting future viability of Franchised Business.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 45–48)

If an Engineering For Kids franchisee transfers their franchise, must the transferee not be in default?

Answer from 2025 FDD Document

What This Means (2025 FDD)

	Provision	Section in	Summary *
		Franchise or other Agreement
c Requirements for you to renew or extend	2.2		Notice, satisfaction of monetary obligations, compliance with Franchise Agreement, not in material default, release, sign then-current form of Franchise Agreement (which may contain materially different terms and conditions than the original agreement), pay a renewal fee, and others; please refer to §§ 2.2.1 –2.2.7 in the Franchise Agreement.
d Termination by you	Not applicable		Subject to state law, you may not terminate the Franchise Agreement.
e Termination by us	Not applicable
without cause
f Termination by us with cause	15		Default under agreement, bankruptcy, abandonment, and other grounds; see § 15 of the Franchise Agreement. (Under the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., we may be unable to terminate the agreement merely because you make a bankruptcy filing.)
g “Cause” defined –	15.3		All other defaults not specified in §§ 15.1 and
curable defaults			15.2 of the Franchise Agreement
h “Cause” defined – non-curable defaults	15.1 and 15.2		Bankruptcy, abandonment, conviction of felony, and others (but under the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., we may be unable to terminate the agreement merely because you make a bankruptcy filing).
i Your obligations on termination/ nonrenewal	16		Immediately stop operating the Franchised Business, stop all use of our trademarks, pay all amounts due, pay liquidated damages if termination was due to your default, and others; see §§ 16.1.1 – 16.1.4 of the Franchise Agreement.
j Assignment of	13		There are no limits on our right to assign the
contract by us			Franchise Agreement.
k “Transfer” by you –	14.1		Includes transfer of any interest.
defined
l Our approval of	14.2		We have the right to approve transfers.
transfer by you
m Conditions for our approval of transfer	14.3		Release, signature of new agreement, payment of transfer fee, meet then-current qualifications to our satisfaction, successfully complete training requirements and pay training fee, arrange to upgrade and conform Franchised
	Provision	Section in Franchise or other Agreement	Summary * Business to then-current standards and specifications, sign our then-current form of personal guarantee; transferee must not be in default, and prices and other proposed terms of transfer must not have effect of negatively impacting future viability of Franchised Business.