Does the death of an owner owning 10% or more of a Marble Slab Creamery franchise constitute an 'Assignment'?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
"Assignment" means:
(i) the direct or indirect, voluntary or involuntary, sale, assignment, transfer, conveyance, gift, pledge, mortgage, hypothecation, or encumbrance, in whole or in part, of:
- (A) this Agreement, or
- (B) all or any substantial portion of the assets of the Restaurant, or
(ii) the direct or indirect, voluntary or involuntary, sale, assignment, transfer, conveyance, gift, pledge, mortgage, or encumbrance of 10% or more, in the aggregate, whether in one or more transactions, of the Equity or voting power of Franchisee, by operation of law or otherwise, or any other event(s) or transaction(s) which, directly or indirectly, effectively changes control of Franchisee;
(iii) the issuance of any securities by Franchisee which by itself or in combination with any other transaction(s) results in its Owners, as constituted on the date of this Agreement, owning, on an as-converted or as-exercised basis, less than 90% of the outstanding Equity or voting power of Franchisee;
(iv) if Franchisee is a Partnership, the resignation, removal, withdrawal, death or legal incapacity of a general partner or of any limited partner owning 10% or more, in the aggregate, whether in one or more transactions, of the Partnership Rights of the Partnership, or the admission of any additional general partner, or the transfer by any general partner of any of its Partnership Rights in the Partnership, or any change in the ownership or control of any general partner;
(v) the death or legal incapacity of any Owner of Franchisee owning 10% or more of the Equity or voting power of Franchisee;
Source: Item 22 — CONTRACTS (FDD page 101)
What This Means (2025 FDD)
According to Marble Slab Creamery's 2025 Franchise Disclosure Document, the death of an owner with a significant stake in the franchise can indeed trigger an 'Assignment' under the franchise agreement. Specifically, if an owner of the Marble Slab Creamery franchise holds 10% or more of the equity or voting power, their death is considered an event that constitutes an assignment.
This provision is crucial for prospective franchisees to understand because an 'Assignment' typically requires the franchisor's approval. If the franchisee entity is structured such that the death of a member triggers a transfer of equity, Marble Slab Creamery would need to approve the new ownership structure. This could involve a review of the proposed new owners, their financial capabilities, and their operational experience.
The franchisor's right to approve such changes ensures that the brand standards and operational consistency of Marble Slab Creamery are maintained. For a franchisee, this means having a clear succession plan in place and understanding the implications for their business and family in the event of an owner's death. It would be prudent to discuss these scenarios with Marble Slab Creamery during the due diligence process to fully understand the requirements and potential impact on the franchise.