Is attempting to transfer the Gokhale Method Franchise Agreement a cause for automatic termination?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.1. Automatic Termination. You shall be deemed to be in default under this Agreement, and all rights granted to you herein shall automatically terminate without notice to you or opportunity to cure, if one or more of the following occur: You become insolvent or make a general assignment for the benefit of creditors; a petition in bankruptcy is filed by you or such a petition is filed against and not opposed by you; you are adjudicated bankrupt or insolvent; a bill in equity or other proceeding for the appointment of a receiver of you or other custodian for your business or assets is filed and consented to by you; a receiver or other custodian (permanent or temporary) of your assets or property, or any part thereof, is appointed by any court of competent jurisdiction; proceedings for a composition with creditors under any state or federal law should be instituted by or against you; a final judgment remains unsatisfied or of record for thirty (30) days or longer (unless supersedes bond is filed); you are dissolved; you die or are declared incompetent; execution is levied against your business or property; suit to foreclose any lien or mortgage against the Location or equipment is instituted against you and not dismissed within thirty (30) days; you attempt to transfer this Franchise Agreement or more than half the assets of the Franchised Business; you delegate teaching of the Gokhale System without our prior written consent; or the real or personal property of the Franchised Business shall be sold after levy thereupon by any sheriff, marshal, or constable.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, attempting to transfer the Franchise Agreement can lead to automatic termination. Specifically, the agreement states that a franchisee will be considered in default, leading to automatic termination without notice or opportunity to cure, if they attempt to transfer the Franchise Agreement.
This provision means that a Gokhale Method franchisee cannot sell, assign, or otherwise transfer their rights and obligations under the Franchise Agreement to another party without potentially facing immediate termination. This restriction is in place to ensure that the Gokhale Method maintains control over who operates franchises under its brand name and system.
Prospective franchisees should be aware of this clause as it significantly limits their ability to exit the business by transferring the franchise to someone else. If a franchisee wishes to sell their business, they would need to seek approval from Gokhale Method, and any unauthorized attempt to transfer the agreement could result in the loss of the franchise.