Must a proposed transfer of the Face Foundrie Area Development Agreement be made in conjunction with a simultaneous transfer of all existing Franchise Agreements?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section(s) in | Summary | |
|---|---|---|---|
| Area Development Agreement | rights or obligations under the Area Development Agreement, or any material asset of your business, without our prior written consent, which shall be subject to all of the conditions and requirements for transfers set forth in the Franchise Agreement executed simultaneously with the Area Development Agreement that we deem applicable to a proposed transfer under the Area Development Agreement. | ||
| (l) Franchisor approval | Section 7.2 | We have the right to approve transfers. | |
| of transfer by area | |||
| developer | |||
| (m) Conditions for franchisor’s approval of transfer | Sections 7.2 and 7.3 | Unless waived, a transfer of the Area Development Agreement is conditioned on, among other factors, the requirement that the proposed transfer of the Area Development Agreement be made in conjunction with a simultaneous transfer of all existing Franchise Agreements to the same approved transferee. Additionally, your first Facial Bar under your first Franchise Agreement must be open and operating. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION OF THE FRANCHISE RELATIONSHIP (FDD pages 51–59)
What This Means (2025 FDD)
According to the 2025 Face Foundrie Franchise Disclosure Document, a transfer of the Area Development Agreement is generally conditioned upon a simultaneous transfer of all existing Franchise Agreements to the same approved transferee. This means that if an area developer wants to transfer their Area Development Agreement to someone else, they must also transfer all of their existing Face Foundrie franchise agreements to the same party, assuming Face Foundrie does not waive this requirement.
This condition ensures that the new area developer takes over the entire existing business operation within the designated area, maintaining continuity and consistency for the Face Foundrie brand. It prevents the fragmentation of the business and ensures that a single, qualified entity manages all aspects of the Face Foundrie operations in that area.
Additionally, the FDD specifies that the first Facial Bar under the first Franchise Agreement must be open and operating before a transfer of the Area Development Agreement can be approved. This requirement likely aims to ensure that the area developer has successfully launched at least one Face Foundrie location and has demonstrated operational capabilities before transferring the development rights to another party. This protects Face Foundrie's interests by ensuring that area developers are actively engaged in establishing the brand before transferring their rights.
It is important for prospective area developers to understand these conditions before entering into an Area Development Agreement with Face Foundrie. They should be prepared to either manage all existing franchises themselves or find a transferee who is willing and able to take over all existing franchise agreements simultaneously. Franchisees should also note that Face Foundrie retains the right to approve any transferee, adding another layer of control over who can become an area developer or franchisee within the Face Foundrie system.