Under what circumstances can a Focalpoint Coaching franchisee grant a security interest in the Franchised Business' assets without the Franchisor's prior written approval?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
B. BY FRANCHISEE.
Franchisee understands and acknowledges that the rights and duties this Agreement creates are personal to Franchisee (or, if Franchisee is an Entity, to Franchisee's owners) and that Franchisor has granted Franchisee the Franchise in reliance upon Franchisor's perceptions of
Franchisee's (or Franchisee's owners') individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, none of the following may be transferred without Franchisor's prior written approval: (i) this Agreement (or any interest in this Agreement); (ii) the Franchised Business (or any right to receive all or a portion of the Franchised Business' profits or losses or capital appreciation related to the Franchised Business); (iii) all or substantially all of the assets of the Franchised Business; (iv) any ownership interest in Franchisee (regardless of its size); or (v) any ownership interest in any of Franchisee's owners (if such owners are legal entities). A transfer of the Franchised Business' ownership, possession, or control, or substantially all of its assets, may be made only with a transfer of this Agreement. Any transfer without Franchisor's approval is a breach of this Agreement and has no effect.
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:
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
Based on the 2025 Focalpoint Coaching Franchise Disclosure Document, a franchisee needs prior written approval from the franchisor to transfer the agreement, the franchised business assets, or ownership interests. The term "transfer" includes any disposition, whether voluntary, involuntary, direct, or indirect. This encompasses granting a security interest in the assets of the Franchised Business.
This requirement means a Focalpoint Coaching franchisee cannot use the business's assets as collateral for a loan or other financial obligation without first getting the franchisor's permission. This provision protects the Focalpoint Coaching brand by ensuring that the franchisee's financial dealings do not put the business at risk without the franchisor's knowledge and consent. The franchisor has the right to assess the potential impact of such security interests on the franchise's operations and reputation.
For a prospective Focalpoint Coaching franchisee, this means including the franchisor in any financial planning that involves leveraging the business's assets. It is essential to communicate openly with Focalpoint Coaching about any need for financing and to seek their approval before granting any security interest. Failure to do so could result in a breach of the franchise agreement, potentially leading to termination of the franchise.