In Minnesota, can Fly To Fit unreasonably withhold consent to the transfer of a franchise?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
With respect to franchises governed by Minnesota law, the franchisor will comply with Minnesota Statutes, Section 80C.14, Subd. 3-5, which require (except in certain specified cases) (1) that a franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-renewal of the franchise agreement and (2) that consent to the transfer of the franchise will not be unreasonably withheld.
Source: Item 23 — RECEIPTS (FDD pages 44–134)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, Minnesota Statutes, Section 80C.14, Subd. 3-5, requires that consent to the transfer of a franchise will not be unreasonably withheld. This applies to franchises governed by Minnesota law.
This means that Fly To Fit cannot arbitrarily deny a franchisee's request to transfer their franchise to a qualified buyer. The franchisor must have a legitimate, justifiable reason for withholding consent. This protection is in place to ensure that franchisees have the ability to sell their business and recoup their investment, provided they find a suitable buyer who meets Fly To Fit's reasonable criteria.
As a prospective franchisee, it is important to understand what constitutes a "reasonable" basis for withholding consent. Fly To Fit may have specific requirements for potential transferees, such as financial stability, relevant experience, and a commitment to upholding brand standards. It would be prudent to discuss these requirements with Fly To Fit during the due diligence process to ensure clarity and avoid potential disputes in the future.