Does Face Foundrie have the right to approve transfers under the Area Development Agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
sions of the franchise and related agreements. You should read these provisions in the agreements attached to this Disclosure Document.**
Franchise Agreement
| 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 Face Foundrie's 2025 Franchise Disclosure Document, Face Foundrie retains the right to approve any transfers related to the Area Development Agreement. Specifically, Face Foundrie's approval is required for the transfer of rights, obligations, or any material assets associated with the Area Development Agreement. This approval is subject to conditions and requirements outlined in the Franchise Agreement, which is executed alongside the Area Development Agreement.
This provision means that if an area developer wishes to transfer their rights or obligations under the Area Development Agreement, they must first obtain Face Foundrie's written consent. Face Foundrie will assess the proposed transfer based on the conditions and requirements specified in the Franchise Agreement. This process allows Face Foundrie to maintain control over who becomes an area developer and ensures that any new developer meets their standards.
Furthermore, the FDD outlines specific conditions for Face Foundrie's approval of a transfer. Unless waived by Face Foundrie, the transfer of the Area Development Agreement must occur simultaneously with the transfer of all existing Franchise Agreements to the same approved transferee. Additionally, the area developer's first Facial Bar under their first Franchise Agreement must be open and operating. These conditions add further layers to the transfer process, ensuring that Face Foundrie's interests are protected and that the new area developer is fully committed and operational.
In the event of the death or incapacitation of the Operating Partner, the area developer must designate a new Operating Partner who owns at least a 20% ownership interest, subject to Face Foundrie's approval. This ensures continuity of operations and adherence to Face Foundrie's standards even in unforeseen circumstances.