What is considered 'good cause' for Focus Cfo to refuse a transfer of ownership?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
- o A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause. The subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise. Good cause shall include, but is not limited to:
- The failure of the proposed transferee to meet the franchisor's thencurrent reasonable qualifications or standards.
- The fact that the proposed transferee is a competitor of the franchisor or Subfranchisor.
- The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
- The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the Franchise Agreement existing at the time of the proposed transfer.
Source: Item 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
According to Focus Cfo's 2025 Franchise Disclosure Document, Focus Cfo can refuse a transfer of ownership for 'good cause.' The document outlines specific instances that constitute 'good cause'. These include situations where the proposed transferee fails to meet Focus Cfo's current qualifications or standards, if the proposed transferee is a competitor of Focus Cfo, or if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations. Additionally, 'good cause' exists if the franchisee or proposed transferee has not paid sums owed to Focus Cfo or has failed to correct any existing default in the Franchise Agreement at the time of the proposed transfer.
For a prospective franchisee, this means that selling their Focus Cfo franchise is not guaranteed. Focus Cfo retains the right to deny a transfer to a buyer who doesn't meet their standards, is a competitor, or refuses to comply with the franchise agreement. This protects Focus Cfo's brand and ensures that new franchisees are qualified and committed.
It is important to note that Focus Cfo can exercise a right of first refusal to purchase the franchise themselves, regardless of whether the proposed transferee is acceptable. This clause ensures Focus Cfo maintains control over who joins their franchise system and allows them to strategically manage their network of franchisees. Franchisees looking to sell should be aware of these limitations and ensure any potential buyer is well-qualified and prepared to meet Focus Cfo's requirements.