Can Engineering For Kids withhold consent for a transfer of partial ownership interest?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
cluding to cooperate with us in obtaining the information that we need in order to review and consider the qualifications of a prospective transferee and to provide us with a copy of the purchase agreement with the buyer.
14.4. Transfer Fee
For a proposed Transfer of the Franchised Business or this Agreement (or, if you are a corporation or other entity, a Transfer of ownership interests that would result in a change of control of your entity), you must pay to us a Transfer fee in the amount of Five Thousand Dollars ($5,000), unless the Transfer qualifies for the reduced fee for a partial interest Transfer under Section 14.5 below.
14.5. Transfer of Partial Ownership Interest
For any proposal to admit a new Owner, to remove an existing Owner, or to change the distribution of ownership shown on the cover page, or for any other transaction that amounts to the Transfer of a partial interest in the Franchised Business, and provided that all such changes would not result in a change of control of your entity, you must give us advance notice and submit a copy of all proposed contracts and other information concerning the Transfer that we may request. Provided that you provide us with all information and documents that we request in co
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, Engineering For Kids has the right to withhold consent for a transfer of partial ownership interest on reasonable grounds. If a franchisee proposes to admit a new owner, remove an existing one, or change the ownership distribution, they must provide advance notice to Engineering For Kids. This includes submitting all proposed contracts and relevant information about the transfer.
If the franchisee provides all requested documents, the transfer fee is reduced to $1,400. Engineering For Kids then has a reasonable time, at least 30 days after receiving all the necessary information, to evaluate the proposed transfer. The franchisee must also meet specific conditions outlined in other sections of the franchise agreement related to transfers.
Engineering For Kids may withhold consent for the transfer based on reasonable grounds or grant consent with reasonable conditions. Any proposed new owner must submit a personal application and execute a personal guarantee, similar to what the original owners did. This ensures that Engineering For Kids maintains control over who becomes involved in the franchise and that all owners are committed to the brand's standards and obligations.