Can Management Recruiters freely transfer or assign the Franchise Agreement, and if so, are there any restrictions?

without providing any rights therein to Franchisee.

• 12.10. Use of Marks on Internet. Prior to Franchisee's use of the Marks, Franchisor must approve Franchisee's domain names, URLs, and electronic addresses if they contain any

of the Marks or any portion or derivative of the Marks. Franchisee must cease use of domain names, URLs, and electronic addresses which contain any of the Marks or any portion or derivative of the Marks upon expiration or termination of the Franchise Agreement.

13. TRANSFER AND ASSIGNMENT

• 13.1. By Franchisor. This Agreement shall be fully and freely transferable and assignable by Franchisor at any time for any reason.
• 13.2. By Franchisee. Franchisee understands and acknowledges that the rights and duties created by this Agreement are personal to Franchisee and its Principals and that Franchisor has entered into this Agreement in reliance upon the individual or collective character, skill, aptitude, attitude, business ability, and financial capacity of Franchisee and its Principals. Therefore, except as hereinafter provided, neither Franchisee's interest in this Agreement nor any of its rights or privileges herein or obligations hereunder shall be sold, assigned, transferred, sublicensed, shared, or divided or otherwise transferred by Franchisee, in whole or in part, voluntarily or involuntarily, by operation of Law or otherwise in any manner, except upon prior written approval of Franchisor, and in accordance with the provisions of this Section 13. Any assignment or transfer without such approval shall constitute a breach of this Agreement and shall convey no rights or interest in the Franchise Business to such purported assignees or transferees. The only permissible methods of sale, transfer or assignment of the Franchise Business are those set forth in this Section 13.
• 13.3. Change of Business Form. Whether or not an assignment or transfer of the Franchise Business is involved, Franchisee, whether an individual or otherwise, shall not change its business form, whether to obtain the services of a partner, to merge, consolidate, reorganize, or to accomplish any other change, without the prior written approval of Franchisor.
• 13.4. Deemed Assignment. If Franchisee is at any time a corporation or limited liability company, then one or more transactions involving (i) issuance of any securities by Franchisee, or (ii) the transfer of stock or voting power of Franchisee, or (iii) any merger or consolidation involving Franchisee, the effect of which shall result in Franchisee's Principals owning or controlling less than fifty-one percent (51%) of the aggregate voting

securities of Franchisee or otherwise losing the right to control the affairs of Franchisee, shall be deemed to be an assignment of this Agreement within the meaning of this Section 13. If Franchisee is at any time a partnership, then the death, voluntary or involuntary or other withdrawal of any general partner, admission of any additional general partner, or transfer of any general partner's interest in the property, management, or profits and/or losses of the partnership shall be deemed to be an assignment within the meaning of this Section 13.

• 13.5. Franchisor's Right of First Refusal. If Franchisee desires to sell or otherwise transfer the Franchise Business and assign this Agreement, Franchisee shall deliver to Franchisor written notice setting forth all the terms of the proposed transfer and assignment and all information that Franchisor requests concerning the proposed assignee. Franchisor shall have the option, during the thirty (30) days after receipt of the notice, to purchase the Franchise Business and accept assignment of this Agreement on the terms contained in the notice, provided that Franchisor shall have the right to substitute the cash equivalent of any non-cash consideration described in such notice. If Franchisor exercises this option, the purchase of the Franchise Business by Franchisor must be completed no later than thirty (30) days after Franchisor's notice to Franchisee of its purchase election. If Franchisor does not exercise this option during such thirty (30) day period then Franchisee may, during the following one hundred twenty (120) days, transfer the Franchise Business and assign this Agreement to the proposed assignee on the terms in the notice, provided that the assignment shall be made, without limitation, in compliance with this Section. Any proposed transfer not completed within such one hundred twenty (120) day period or any material change in the terms of the proposed transaction prior to closing shall constitute a new offer to which Franchisor shall have the right of first refusal and shall require compliance with this Section 13.5.
• 13.6. Further Conditions. If Franchisor elects not to exercise its right of first refusal, Franchisor's approval of a proposed transfer shall not be unreasonably withheld. However, without limitation of the foregoing, imposition of any or all of the following conditions precedent to Franchisor's approval shall be deemed to be reasonable:
  • 13.6.1. Transfer to Franchisee's Corporation.If Franchisee is an individual or partnership and desires to assign and transfer his rights to a newly organized corporation or limited liability company solely for the convenience of ownership:

• such entity's charter shall provide that its activities are confined exclusively to operating the Franchise Business as set forth in this Agreement;
• Franchisee shall be, and shall remain, the owner of the majority stock interest in the transferee corporation or limited liability company;

Source: Item 23 — RECEIPTS (FDD pages 67–327)