Does Hawaiian Bros Island Grill have the right to evaluate the qualifications of potential transferees?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
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)
Source: Item 23 — RECEIPTS (FDD pages 77–262)
What This Means (2025 FDD)
According to the 2025 FDD, Hawaiian Bros Island Grill retains the right to evaluate potential transferees. The FDD states that the company’s consent to any transfer of a franchise is conditional. Specifically, a proposed transferee who would be a new Hawaiian Bros Island Grill franchisee must meet the company's then-current criteria for new franchisees. Similarly, if the proposed transferee is an existing franchisee, they must meet the current criteria for franchisees looking to expand within the Hawaiian Bros Island Grill system beyond their existing commitments.
This means that if a franchisee wants to sell their Hawaiian Bros Island Grill business to someone else, that potential buyer must be approved by the company. Hawaiian Bros Island Grill will assess whether the buyer meets the standards they have in place at that time for new franchisees. These standards could include financial qualifications, business experience, and other factors that Hawaiian Bros Island Grill deems important for a franchisee to succeed.
For existing franchisees looking to expand, Hawaiian Bros Island Grill will also evaluate whether they meet the criteria for expansion. This could involve assessing their performance at their current location(s), their financial capacity to take on additional units, and their compliance with the franchise agreement. Additionally, the franchisee selling the business must fulfill all outstanding obligations to Hawaiian Bros Island Grill or its affiliates before the transfer can be approved. This ensures that the seller is in good standing with the franchisor before exiting the system.