What is the process for an involuntary transfer of a Hawaiian Bros Island Grill development agreement?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
As used in this Section 10, "transfer" includes any sale, assignment, transfer, license, sublicense, sublease, collateral assignment, grant of a security, collateral or conditional interest, pledge, hypothecation, inter-vivos transfer or testamentary disposition, in each case, whether voluntary or involuntary.
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 must meet Company's then-current criteria for new franchisees entering the System, (2) Developer must satisfy all of its outstanding obligations to Company or its Affiliates, (3) the transferee (or Developer, if an Ownership Interest is transferred) must execute Company's then-current form of Development Agreement and other collateral agreements Company may then require, (4) Developer 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 (5) Developer must have complied with any other conditions that Company reasonably requires from time to time as part of its transfer policies.
Source: Item 23 — RECEIPTS (FDD pages 77–262)
What This Means (2025 FDD)
According to the 2025 Hawaiian Bros Island Grill Franchise Disclosure Document, an involuntary transfer of a development agreement is treated as any other transfer. A "transfer" includes any sale, assignment, transfer, license, sublicense, sublease, collateral assignment, grant of a security, collateral or conditional interest, pledge, hypothecation, inter-vivos transfer or testamentary disposition, in each case, whether voluntary or involuntary.
Company consent is required for any direct or indirect transfer of an interest. Hawaiian Bros Island Grill will assess a proposed transferee based on its current criteria for new franchisees. The developer must also satisfy all outstanding obligations to Hawaiian Bros Island Grill or its affiliates. The transferee (or the developer, if an ownership interest is transferred) must execute the then-current form of the Development Agreement and other collateral agreements that Hawaiian Bros Island Grill may require.
Furthermore, the developer and each principal must provide Hawaiian Bros Island Grill with an unconditional, general release of all claims against the company, its affiliates, and their respective owners, directors, officers, and agents, in a form and substance satisfactory to Hawaiian Bros Island Grill. The developer must also comply with any other conditions that Hawaiian Bros Island Grill reasonably requires as part of its transfer policies.
These conditions ensure that any new developer meets the standards and obligations set by Hawaiian Bros Island Grill, protecting the brand and the interests of other franchisees. It is important for prospective franchisees to understand these requirements, as failure to meet them can prevent the transfer of the development agreement.