In Michigan, under what circumstances can Focus Cfo refuse to permit a transfer of ownership of a franchise?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
the extent permitted by applicable law, Focus CFO has the right to require Franchisee to sign a release in connection with any refund of the Franchisee Fee.
12. TRANSFER
12.1. Franchisee may sell, convey, or otherwise transfer its Franchise ("Transferring Area President") to another individual ("Recipient Area President") so long as the following conditions are satisfied:
Conditions to Transfer by Franchisee:
- 12.1.1. All transfers are required to be approved by Focus CFO in writing prior to the transfer occurring.
- 12.1.2. The Transferring Area President must have been a Franchisee for at least (2) years and developed a Book of Business, as defined in Attachment A of this Agreement, with at least Five Hundred Thousand Dollars ($500,000) of collected (cash basis) revenue during the twelve (12) months preceding the desired Transfer;
- 12.1.3. The Recipient Area President (i) must be an existing Focus CFO franchisee prior to the Transfer and not be in breach of his or her Franchise Agreement or (ii) an
individual interested in becoming a franchisee who enters into the then-current Franchise Agreement with Focus CFO;
- 12.1.4. The Transferring Area President provides to Focus CFO at least ninety (90) days' advance written notice of the Transfer if to an existing franchisee and at least 120 days' notice if to a new franchisee;
- 12.1.5. The Transferring Area President and the Recipient Area President shall provide Focus CFO a summary of all material terms and conditions upon which the Transfer is to be made, including but not limited to the purchase price to be paid by the Recipient Area President to the Transferring Area President, if any, and any agreement to split the revenue from the Book of Business among the Transferring Area President and Recipient Area President, including the percentage split and for how long; and
- 12.1.6. The Transferring Area President's Franchise Agreement automatically terminates twelve (12) months from the date of transfer, if not terminated by the Transferring Area President at the date of transfer. To the extent permitted by applicable law, the Transferring Area President shall execute a general release on the date of termination.
- 12.2. Post-Transfer Payment. Following the Transfer, Focus CFO shall be responsible for making any payments owed by Focus CFO to the Recipient Area President under the terms of the then-current Franchise Agreement.
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 if the conditions outlined in section 12.1 of the franchise agreement are not met. These conditions include obtaining Focus CFO's prior written approval, the transferring franchisee having been a franchisee for at least two years and developed a book of business with at least $500,000 of collected revenue during the 12 months preceding the desired transfer. The recipient must also be an existing, compliant Focus CFO franchisee or an approved new franchisee.
Focus CFO states that it will not unreasonably withhold consent to the transfer if the criteria mentioned above have been met. This implies that if the transferring franchisee meets all the listed conditions, Focus CFO's ability to deny the transfer is limited. However, the FDD does not explicitly detail specific scenarios or reasons Focus CFO might deem reasonable to withhold consent even if the conditions are met.
While the franchise agreement is governed by Ohio law, the document includes a specific addendum for Michigan. However, this addendum does not modify or address the transfer conditions outlined in Section 12 of the Franchise Agreement. Therefore, the standard transfer conditions apply to Focus CFO franchisees in Michigan. A prospective franchisee in Michigan should seek clarification from Focus CFO regarding what specific circumstances, beyond failing to meet the stated conditions, could lead to a transfer being denied.