Under what conditions can a Ledgers franchisee transfer their interest in the Franchise Agreement?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
7.2. Transfer by You
You may transfer your interest in this Agreement or your ownership in the Franchise Business if:
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- you are in full compliance with the Agreement,
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- current in all monies owed to us,
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- we approve of the individual or entity to which you are transferring ("Transferee"), which our consent will not be unreadably withheld;
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- Transferee meets the requirements of Section 7.8.
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- You sign the then current transfer and release form, and
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- You pay to use the transfer fee (if any). See Section 2.11.
7.3. Joint Tenancy
If this Agreement is held by joint tenants or tenants in common, all joint tenants or tenants in common must join in any transfer of an ownership interest in this Agreement, except any person who is deceased or under a legal disability.
7.4. Transfer to Controlled Entity
A "Controlled Entity" is an entity in which you are the beneficial owner of 100% of each class of voting ownership interest. A transfer to a "Controlled Entity" will not trigger the Right of First Refusal. At the time of the desired transfer of interest to a Controlled Entity, you must notify us in writing of the name of the Controlled Entity and the name and address of each officer, director, shareholder, member, partner, or similar person and their respective ownership interest. Each such person of the Controlled Entity must sign the then-current amendment and release forms or Franchisee Agreement as required by us. We do not charge a transfer fee for this change.
7.5. Transfer within an Entity
A transfer of interest within a Franchisee entity will not trigger the Right of First Refusal if only the percentage ownership changes rather than the identity of the owners. At the time of the desired transfer of interest within an entity, you must notify us in writing of the name and address of each officer, director, shareholder, member, partner or similar person and their respective ownership interest. Each such person of the Controlled Entity will sign the then-current amendment and release forms or Franchisee Agreement as required by us. We do not charge a transfer fee for this change.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, a franchisee can transfer their interest in the Franchise Agreement under specific conditions. The franchisee must be in full compliance with the agreement and current on all monies owed to Ledgers. Ledgers must also approve of the individual or entity to which the franchisee is transferring the interest, and Ledgers's consent will not be unreasonably withheld. The transferee must also meet certain requirements detailed in Section 7.8 of the agreement.
To complete the transfer, the franchisee must sign the then-current transfer and release form and pay the transfer fee, if applicable, as outlined in Section 2.11 of the Franchise Agreement. If the agreement is held by joint tenants or tenants in common, all parties must participate in the transfer, unless they are deceased or under legal disability.
There are exceptions to the transfer rules. A transfer of interest within a franchisee's entity does not trigger Ledgers's right of first refusal if only the percentage ownership changes and not the identity of the owners. The franchisee must notify Ledgers in writing of the name and address of each officer, director, shareholder, member, partner, or similar person and their respective ownership interest. Each person of the controlled entity must sign the then-current amendment and release forms or Franchisee Agreement as required by Ledgers, and no transfer fee is charged for this type of change. Additionally, a transfer to a Controlled Entity, defined as an entity where the franchisee is the beneficial owner of 100% of each class of voting ownership interest, will not trigger the Right of First Refusal, requiring the franchisee to notify Ledgers in writing of the name of the Controlled Entity and the name and address of each officer, director, shareholder, member, partner, or similar person and their respective ownership interest.