Does Face Foundrie specify what constitutes an 'unreasonable' withholding of consent for a transfer?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
urthermore, in the event that any Owner is an Entity, the interests of the shareholders, members, partners, beneficiaries, investors or other equity holders, as the case may be, in such Owner, may not be Transferred, without the prior written consent of Franchisor. Franchisor will not unreasonably withhold consent to a Transfer provided the requirements of Section 13.02 have been satisfied. Any Transfer in violation of this Section shall be void and of no force and effect.
13.02 Conditions for Approval. If Franchisor has not exercised its right of first refusal under Section 13.05, Franchisor will not unreasonably withhold its approval of a Transfer that meets all of the reasonable restrictions, requirements and conditions Franchisor may impose on the Transfer, the transferor(s) and/or the transferee(s), including the following:
(a) Franchisee and its Owners and Affiliates must be in compliance with the provisions of this Agreement and all other agreements with Franchisor or any of its Affiliates and have paid all outstanding amounts owed thereto, as well as to the approved suppliers to the System;
(b) The transferee shall demonstrate to Franchisor's satisfaction that the terms of the proposed transfer do not place an unreasonable financial or operational burden on the transferee, and that the transferee (or, if the transferee is other than an individual, such owners of beneficial interests in the transferee as Franchisor may request) meets Franchisor's then-current application qualifications (which may include educational, managerial, socially responsible, and business standards, good moral character, business reputation, and credit rating); has the aptitude and ability to operate the Facial Bar and absence of conflicting interests; and has adequate financial resources and capital to operate the Facial Bar;
(c) The proposed transferee must enter into an agreement in writing to assume and perform all of Franchisee's duties and obligations hereunder and/or, as required by Franchisor, execute the form of franchise agreement then being offered to new System franchisees, and such other ancillary agreements required by Franchisor for the Facial Bar franchised hereunder, which agreements shall supersede this Agreement and its ancillary documents in all respects, and the terms of which may differ from the terms of this Agreement including, without limitation, higher and/or additional fees;
(d) The transferee (and, if the transferee is not an individual, the Operating Partner), shall, at the transferee's expense, successfully attend and successfully complete any training programs then in effect for operators upon such terms and conditions as Franchisor may reasonably require;
(e) Franchisee or the proposed transferee must pay Franchisor a transfer fee equal to the greater of (i) Ten Thousand Dollars ($10,000), or (ii) reimbursement for all legal, accounting, training and other expenses incurred by Franchisor in connection with the Transfer;
(f) Franchisee and its Owners and Affiliates must, except to the extent limited or prohibited by applicable law, execute a general release, in form and substance satisfactory to Franchisor, of any and all claims against Franchisor and its Affiliates, stockholders, officers, directors, employees, agents, successors and assigns;
(g) The transferee of an Owner shall be designated as an Owner and each transferee who is designated an Owner shall enter into a written agreement, in a form satisfactory to Franchisor, agreeing to be bound as an Owner under the terms of this Agreement as long as such person or entity owns any interest in Franchisee. Additionally, the transferee and/or such owners of the transferee as Franchisor may request shall guarantee the performance of the transferee's obligations in writing in a form satisfactory to Franchisor;
(h) If Franchisee (or any of its Owners or Affiliates) finances any part of the sale price of the transferred interest, Franchisee and/or such Owners or Affiliates must agree that all obligations of the transferee, and security interests reserved by any of them in the assets transferred, will be subordinate to the transferee's obligations to pay all amounts due Franchisor and its Affiliates; and
(i) If so requested by Franchisor, Franchisee, at its expense, shall upgrade the Facial Bar and all equipment of the Facial Bar to conform to the then-current standards,
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to the 2025 Face Foundrie Franchise Disclosure Document, Face Foundrie outlines conditions under which it will not unreasonably withhold consent for a transfer. Face Foundrie states it will not unreasonably withhold its approval of a transfer that meets the restrictions, requirements, and conditions it may impose on the transfer, the transferor(s), and/or the transferee(s).
These conditions include ensuring the franchisee, its owners, and affiliates are compliant with all agreements and have paid all outstanding amounts to Face Foundrie, its affiliates, and approved suppliers. The transferee must demonstrate that the transfer terms do not create an unreasonable financial or operational burden and must meet Face Foundrie's current application qualifications, including educational, managerial, and business standards, good moral character, business reputation, and credit rating. The transferee must also show the aptitude and ability to operate the Facial Bar, have no conflicting interests, and possess adequate financial resources and capital.
The transferee must agree in writing to assume all of the franchisee's duties and obligations or execute the current franchise agreement, which may have different terms, including higher fees. The transferee, or the operating partner if the transferee is not an individual, must complete any required training programs. The franchisee or transferee must pay a transfer fee equal to the greater of $10,000 or reimbursement for Face Foundrie's expenses. The franchisee, its owners, and affiliates must execute a general release of claims against Face Foundrie, except where prohibited by law. The transferor remains liable for obligations arising before the transfer date and must execute documents to evidence this liability. If Face Foundrie requests, the franchisee must upgrade the Facial Bar to current standards at its expense.
These stipulations provide clarity to potential franchisees regarding the conditions that must be met for a transfer to be approved, and what Face Foundrie considers reasonable requirements. A prospective franchisee should carefully consider these conditions to understand the requirements for transferring their franchise in the future.