Does Focalpoint Coaching consider a transfer of ownership of capital stock to be a transfer?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
In this Agreement, the term "transfer" includes a voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition. An assignment, sale, gift, or other disposition includes the following events:
- (a) transfer of ownership of capital stock, a partnership or membership interest, or another form of ownership interest;
- (b) merger or consolidation or issuance of additional securities or other forms of ownership interest;
- (c) any sale of a security convertible to an ownership interest;
- (d) transfer of an interest in Franchisee, this Agreement, the Franchised Business or all or substantially all of its assets, or Franchisee's owners in a divorce, insolvency, or entity dissolution proceeding or otherwise by operation of law;
- (e) if Franchisee, one of Franchisee's owners, or an owner of one of Franchisee's owners dies, a transfer of an interest in Franchisee, this Agreement, the Franchised Business or substantially all of its assets, or Franchisee's owner by will, declaration of or transfer in trust, or under the laws of intestate succession; or
- (f) pledge of this Agreement (to someone other than Franchisor) or of an ownership interest in Franchisee or Franchisee's owners as security, foreclosure upon the Franchised Business, or Franchisee's transfer, surrender, or loss of the Office's possession, control, or Franchised Business' management. Franchisee may grant a security interest (including a purchase money security interest) in the Franchised Business' assets (not including this Agreement) to a lender that finances Franchisee's acquisition, development, and/or operation of the Franchised Business without having to obtain Franchisor's prior written approval as long as Franchisee gives Franchisor ten (10) days' prior written notice.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, the term "transfer" includes the transfer of ownership of capital stock. Specifically, Focalpoint Coaching defines a transfer as any voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition, which includes the transfer of ownership of capital stock, a partnership or membership interest, or another form of ownership interest.
This definition is important for prospective Focalpoint Coaching franchisees because it clarifies that any change in ownership structure, even if it doesn't involve a direct sale of the franchise itself, may be considered a transfer under the franchise agreement. This could trigger certain requirements or restrictions outlined in the agreement, such as the need for franchisor approval and the fulfillment of specific conditions.
For example, if a franchisee initially owns the Focalpoint Coaching franchise through a corporation and later decides to sell a portion of the company's stock, this would be considered a transfer. Similarly, the issuance of additional securities or other forms of ownership interest also constitutes a transfer. Franchisees need to be aware of these stipulations to ensure they remain in compliance with the franchise agreement and avoid potential penalties or termination.