In Michigan, what constitutes '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 the 2025 Focus Cfo Franchise Disclosure Document, in Michigan, Focus Cfo can refuse a transfer of ownership for 'good cause.' This includes several specific situations that protect Focus Cfo's brand and standards.
'Good cause' includes instances where the proposed transferee doesn't meet Focus Cfo's current qualifications or standards. This ensures that any new franchisee maintains the quality and reputation of the Focus Cfo brand. It also covers situations where the proposed transferee is a competitor of Focus Cfo, preventing potential conflicts of interest and protecting Focus Cfo's market position. Additionally, refusal is justified if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations, ensuring adherence to the franchise agreement and legal requirements.
Furthermore, Focus Cfo can refuse a transfer if the franchisee or proposed transferee has not paid all sums owed to Focus Cfo or has failed to correct any existing default in the Franchise Agreement at the time of the proposed transfer. This protects Focus Cfo's financial interests and ensures that all obligations are met before a transfer is approved. These conditions provide Focus Cfo with clear grounds to refuse a transfer, safeguarding the integrity and financial stability of the franchise system.