Does Kitchen Solvers require consent for a transfer even in the event of franchisee insolvency?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of your insolvency or the filing of any petition by or against you under any provisions of any bankruptcy or insolvency law, if your legal representative, successor, receiver or trustee desires to succeed to your interest in this Agreement or your Business, such person first must so notify us, must tender the right of first refusal provided for in Subparagraph 14.E, and if we fail to exercise such right, must apply for and obtain our consent to the transfer and satisfy the transfer conditions described in Subparagraph 14.C. In addition, you or the assignee must pay our attorneys' fees and costs incurred in any bankruptcy or insolvency proceeding pertaining to you.
Source: Item 22 — Contracts (FDD page 49)
What This Means (2025 FDD)
According to Kitchen Solvers's 2025 Franchise Disclosure Document, if a franchisee faces insolvency and a legal representative, successor, receiver, or trustee wishes to take over the franchise agreement or business, they must first notify Kitchen Solvers. They must also offer Kitchen Solvers the right of first refusal.
Furthermore, if Kitchen Solvers declines to exercise their right of first refusal, the representative must then seek and obtain Kitchen Solvers's consent for the transfer. The representative must also meet the transfer conditions outlined in Subparagraph 14.C of the franchise agreement.
Additionally, the franchisee or the assignee is responsible for covering Kitchen Solvers's legal fees and costs associated with any bankruptcy or insolvency proceedings involving the franchisee. This requirement ensures that Kitchen Solvers retains control over who operates a franchise under their brand, even in situations of financial distress, and that they are compensated for legal expenses incurred during such proceedings.