Must a Flowerama franchisee complete all appropriate agreements required by the Franchisor as a result of assigning the franchise to a controlled corporation or limited liability company?
Flowerama Franchise · 2024 FDDAnswer from 2024 FDD Document
- c. Assignment to a Controlled Corporation or Limited Liability Company. If Franchisee is an individual, individuals or a partnership, Franchisor expressly consents to the assignment of this franchise to a corporation or limited liability company formed and controlled by Franchisee to operate the Franchised Unit; provided, however, that Franchisee shall be and remain, together with said corporation and its shareholders, or said limited liability company and its members, jointly and severally liable for all obligations under the Franchise Agreement and for all breaches thereof and, provided further, that Franchisee shall continue to supervise the operation of the Franchised Unit.
Franchisee shall immediately notify Franchisor of any such assignment and shall complete all appropriate agreements required by Franchisor as a result thereof.
No transfer fee shall be charged by Franchisor for its participation in this type of transfer; provided, however, that a transfer pursuant to
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 72–77)
What This Means (2024 FDD)
According to Flowerama's 2024 Franchise Disclosure Document, if a franchisee who is an individual, individuals, or a partnership assigns the franchise to a corporation or limited liability company that they control to operate the Franchised Unit, they must complete all appropriate agreements required by Flowerama as a result of the assignment. The franchisee, along with the corporation and its shareholders or the limited liability company and its members, will remain jointly and severally liable for all obligations under the Franchise Agreement and for any breaches. Additionally, the franchisee must continue to supervise the operation of the Franchised Unit.
Flowerama requires immediate notification of any such assignment. This type of transfer is permitted only once, and Flowerama will not charge a transfer fee for its participation in this specific type of transfer.
This policy ensures that Flowerama maintains control over who operates its franchises and that the original franchisee remains responsible for the franchise's performance even after the assignment to a controlled entity. A prospective franchisee should understand these conditions before entering into a franchise agreement, as they dictate the terms under which the franchise can be assigned to a corporation or LLC.