Does the Floyds 99 Franchise Agreement require the proposed transferee to meet certain financial qualifications?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
to the Franchisor sufficient for the Franchisor to assess the proposed transferee's business experience, aptitude and financial qualification, and the Franchisor shall have ascertained that the proposed transferee meets such qualifications;
- f. Execution by Franchisee of a general release, in a form satisfactory to the Franchisor, of any and all claims against the Franchisor, its affiliates and their respective officers, directors, employees and agents;
- g. Payment by the Franchisee or the proposed transferee of $7,500;
- h. Neither the proposed transferee nor any of its direct or indirect owners or affiliates operates, has an ownership interest in or performs services for a Competitive Business; and
- i. Agreement by the Franchisee to abide by the post-termination covenant not to compete set forth in Section 22.2 below.
The Franchisor will not unreasonably withhold, delay or condition its consent to any proposed transfer by the Franchisee which requires the Franchisor's consent under this Section 18.2.
18.3 Franchisor's Approval of Transfer. The Franchisor has 90 days from the date of the written notice of the proposed transfer to approve or disapprove in writing, of the Franchisee's proposed transfer. The Franchisee acknowledges that the proposed transferee shall be evaluated for approval by the Franchisor based on the same criteria as is currently being used to assess new franchisees of the Franchisor and that such proposed transferee shall be provided, if appropriate, with such disclosures as may be required by state or federal law. If the Franchisee and the proposed transferee comply with all conditions for assignment set forth herein and the Franchisor has not given the Franchisee notice of its approval or disapproval within the
90-day period, approval is deemed granted. The Franchisor's approval of any transfer shall not constitute approval for any subsequent transfer or a waiver of any of the Franchisor's rights under this Article 18.
- 18.4 Right of First Refusal. If the Franchisee wishes to transfer its rights under this Agreement or any interest in it, or any
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the proposed transferee will be evaluated using the same criteria as new franchisees. This suggests that the proposed transferee will need to meet the then-current financial qualifications for new franchisees.
In the event that a franchisee wishes to transfer their rights under the Franchise Agreement, Floyds 99 has a right of first refusal. This means that Floyds 99 has the option to purchase the rights, interest, or assets on the same terms and conditions as the written offer submitted by the proposed purchaser.
Before a transfer can occur, the franchisee or proposed transferee must pay Floyds 99 a fee of $7,500. Additionally, neither the proposed transferee nor any of its direct or indirect owners or affiliates can operate, have an ownership interest in, or perform services for a competitive business. The franchisee must also agree to abide by the post-termination covenant not to compete.