Does the Focalpoint Coaching franchise agreement require a transfer of the agreement when transferring the Franchised Business' ownership?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
For any other proposed transfer (including a transfer of this Agreement, a transfer of a controlling ownership interest in Franchisee or one of Franchisee's owners, or a transfer which is one of a series of transfers (regardless of the time period over which these transfers take place) which in the aggregate transfer this Agreement or a controlling ownership interest in Franchisee or one of Franchisee's owners) all of the following conditions must be met before or concurrently with the effective date of the transfer:
Despite Subsection 12.C above, if Franchisee is fully complying with this Agreement, Franchisee may transfer this Agreement to a corporation or limited liability company which conducts no business other than the Franchised Business and, if applicable, other FocalPoint Franchised Businesses, in which Franchisee maintains management control, and of which Franchisee owns and controls one hundred percent (100%) of the equity and voting power of all issued and outstanding ownership interests, provided that all of the Franchised Business' assets are owned, and the Franchised Business' business is conducted, only by that single corporation or limited liability company. The corporation or limited liability company must expressly assume all of Franchisee's obligations under this Agreement. Transfers of ownership interests in the corporation or limited liability company are subject to the conditions of Subsection 12.C above that otherwise apply to non-controlling transfers. Franchisee agrees to remain personally liable under this Agreement as if the transfer to the corporation or limited liability company did not occur.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to the 2025 Focalpoint Coaching Franchise Disclosure Document, the franchise agreement does address the transfer of the agreement under certain conditions. Specifically, the agreement stipulates that if a franchisee wishes to transfer the agreement, or a controlling ownership interest, certain conditions must be met. These conditions must be satisfied either before or at the same time as the transfer takes effect.
Focalpoint Coaching requires that the franchisee be in full compliance with the existing franchise agreement to be eligible for transfer. The franchisor retains the right to approve or deny a transfer based on whether the outlined requirements are met. This provision allows Focalpoint Coaching to maintain control over who operates a franchise under their brand name and ensures that new owners meet their standards.
However, there is an exception: a franchisee can transfer the agreement to a wholly-owned corporation or LLC without needing to meet the standard transfer requirements, provided the entity's sole business is the Focalpoint Coaching franchise and the franchisee maintains 100% ownership and control. Even in this case, the franchisee remains personally liable under the agreement, and subsequent transfers of ownership in the corporation or LLC are subject to the standard transfer conditions. This exception provides some flexibility for franchisees in structuring their business while still protecting the franchisor's interests.