What financial obligations must a Golden Krust Caribbean Restaurant franchisee satisfy before transferring the franchise?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
of one of your owners, by will, declaration of or transfer in trust or under the laws of intestate succession; or
- (f) pledge of this Agreement (to someone other than us) or of an ownership interest in you as security, foreclosure upon the Restaurant or your transfer, surrender or loss of possession, control or management of the Restaurant.
C. CONDITIONS FOR APPROVAL OF TRANSFER
Our approval for a transfer shall be conditioned upon the following:
(1) you be then in full compliance with the terms of this and any other agreement between us including but not limited to complying with all current system standards and you or the transferee paying
to us a transfer fee of $10,000.00. In addition, you and the transferee must sign all agreements we require (which may include an assignment agreement or a new franchise agreement (or the remainder of the term of this Agreement)).
- (2) the transferee and its owners meeting our then-current criteria for franchisees, having adequate financial resources, aptitude, experience and otherwise being capable of operating a Golden Krust Restaurant.
- (3) you submitting all proposed advertisements for the sale or other disposition of the franchise to us for written approval, our approval shall not be unreasonably withheld;
- (4) you paying all amounts owed to us and our affiliates and all other creditors of your Golden Krust Restaurant;
- (5) you executing a general release of us, our affiliates and officers, directors and employees; and
- (6) the transferee purchasing all of your assets used in the Golden Krust Restaurant, assuming all of your existing business liabilities including liabilities owed to us and assuming your lease.
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, a Golden Krust Caribbean Restaurant franchisee must meet several financial obligations to gain approval for a franchise transfer. The franchisee must be in full compliance with all agreements with Golden Krust, which includes adhering to current system standards. Additionally, either the franchisee or the transferee is responsible for paying a transfer fee of $10,000 to Golden Krust.
Furthermore, the franchisee must pay all outstanding amounts owed to Golden Krust Caribbean Restaurant and its affiliates, as well as any other creditors of the Golden Krust Restaurant location. The transferee must also purchase all of the franchisee's assets used in the Golden Krust Restaurant, assume all existing business liabilities, including those owed to Golden Krust, and assume the existing lease agreement for the premises.
These conditions ensure that Golden Krust Caribbean Restaurant maintains its standards and receives all outstanding payments before a transfer is approved. The financial obligations placed on both the franchisee and the transferee protect the brand's financial interests and ensure the new owner is financially capable and responsible. This is a fairly standard practice in franchising, as franchisors typically want to ensure a smooth transition and protect their brand's reputation and financial stability.