What are the conditions that Hawaiian Bros Island Grill places on its consent for a transfer of interest?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchised Restaurant, pledge, hypothecation, inter-vivos transfer or testamentary disposition, in each case, whether voluntary or involuntary, and the grant of rights to convert any debt or other obligation or instrument into an Ownership Interest, including warrants, options, and convertible debt. Without limiting Company's right to consent or withhold consent to a proposed transfer, whether to an individual or any Business Entity, Company's consent to any transfer will be conditioned on the following: (1) a proposed transferee that is a new Hawaiian Bros franchisee must meet Company's then-current criteria for new franchisees entering the System, (2) a proposed transferee that is an existing Hawaiian Bros franchisee must meet Company's then-current criteria for existing franchisees desiring to expand within the System beyond their commitments under their existing Development Agreement(s), (3) Franchisee must satisfy all of its outstanding obligations to Company or its Affiliates, (4) the Franchised Restaurant and Restaurant Premises must be in compliance with Company's then-current Standards, (5) the proposed transferee and the transferee's General Manager must satisfactorily complete Company's training program, (6) the transferee (or the Franchisee, if an Ownership Interest is transferred) must execute Company's thencurrent form of Franchise Agreement (which will limit the term of the transferee's franchise to the unexpired portion of the Term), Assignment of Telephone Number(s) and Online Presence, Authorization Agreement for Preauthorized Payments, and/or any other collateral agreements Company may then require, (7) concurrent with the execution of the then-current form of Franchise Agreement, each Controlling Principal of the transferee and their spouse (if any), must execute a Guaranty, (8) Franchisee, its Affiliates, and each Principal must give Company an unconditional, general release, in form and substance satisfactory to Company, of all claims they may have against Company and its Affiliates and their respective owners, directors, officers, and agents, and (9) Franchisee must have complied with any other conditions that Company reasonably requires from time to time as part of its transfer policies. Franchisee may not place in any communication media or any form of advertising, any
Source: Item 23 — RECEIPTS (FDD pages 77–262)
What This Means (2025 FDD)
According to Hawaiian Bros Island Grill's 2025 Franchise Disclosure Document, the company has specific conditions for consenting to any transfer of interest, whether to an individual or a business entity. These conditions ensure that any new franchisee or existing franchisee expanding within the system meets the company's current standards. A proposed new transferee must meet the then-current criteria for new franchisees. An existing franchisee looking to expand must meet the criteria for franchisees desiring to expand within the system beyond their existing Development Agreement commitments.
Furthermore, the franchisee seeking to transfer must fulfill all outstanding obligations to Hawaiian Bros Island Grill or its affiliates. The franchised restaurant and its premises must comply with the company's current standards. The proposed transferee and their General Manager must satisfactorily complete the company's training program. The transferee (or the franchisee, if an ownership interest is transferred) is required to execute the company's current form of Franchise Agreement, which limits the term to the unexpired portion of the original term, along with other agreements like the Assignment of Telephone Number(s) and Online Presence, and an Authorization Agreement for Preauthorized Payments.
Additionally, each Controlling Principal of the transferee and their spouse must execute a Guaranty concurrent with the Franchise Agreement. The franchisee, its affiliates, and each principal must provide Hawaiian Bros Island Grill with an unconditional, general release of all claims against the company and its affiliates. Finally, the franchisee must comply with any other conditions that Hawaiian Bros Island Grill reasonably requires as part of its transfer policies. A transfer fee of $10,000 is required prior to any transfer.
These conditions are typical in franchising, as franchisors want to ensure that any new or expanding franchisees are well-qualified and will maintain the brand's standards. The transfer fee is also a common practice to cover the franchisor's costs associated with the transfer process. Prospective franchisees should carefully review these conditions and ensure they can meet them before considering a transfer of interest.