Can Marble Slab Creamery withhold consent for a transfer of the franchise for any reason?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| franchise is terminated or expires | competitive business for 2 years within 5 miles of the location of your Restaurant or any other Restaurant operated or intended to be operated under the Marks. | ||
| s. | Modification of the agreement | Section 20 | Except for changes we can make, no amendment without mutual written consent |
| t. | Integration/merger clause | Section 25 | Only terms of Franchise Agreement are binding (subject to state law). Any representations or promises outside of the disclosure document and franchise agreement may not be enforceable. |
| u. | Dispute resolution by arbitration or mediation | Section 21 | Subject to state law, except for certain claims, all disputes must be arbitrated in the county in which our headquarters are located (currently Los Angeles, California) |
| v. | Choice of forum | Section 21 | Subject to state law, arbitration in the county in which our headquarters is located (currently Los Angeles, California) |
| w. | Choice of law | Section 21 | California; if a provision is unenforceable under California law, then laws of the state in which the Restaurant is located apply to that provision. Any dispute between the parties must be brought or instituted within 1 year from the date of discovery of the conduct or event that is the basis of the legal action or proceeding. |
| Provision | Section in Multi- Unit Restaurant Agreement | Summary subject to notice and cure provisions in the other agreement. | |
| i. | Your obligations on termination/non- renewal | Section 4.3 | You will have no further right to develop or operate additional Restaurants which are not, at the time of termination, the subject of a then existing Franchise Agreement between you and us. You may continue to own and operate all Restaurants pursuant to then- existing Franchise Agreements, |
| j. | Assignment of contract by MSC | Section 7.1 | No restriction on our right to assign. |
| k. | “Transfer” by you – definition | Section 7.3 | Includes transfer of the agreement, changes in ownership of the entity which owns it. |
| l. | MSC’s approval of transfer by you | Section 7.3 | Transfers require our express written consent, which may be withheld for any reason whatsoever, in our sole and absolute d |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 74–85)
What This Means (2025 FDD)
According to the 2025 Marble Slab Creamery Franchise Disclosure Document, Marble Slab Creamery has the right to deny a transfer request for any reason. Specifically, if the franchise agreement is a Multi-Unit Restaurant Agreement, Marble Slab Creamery's express written consent is required for any transfer, and this consent may be withheld for any reason whatsoever, at their sole and absolute discretion, as stated in Section 7.3 of the agreement.
For a prospective franchisee, this means that selling or transferring ownership of their Marble Slab Creamery franchise is not guaranteed, even if they find a qualified buyer. Marble Slab Creamery has broad authority to reject a transfer, which could impact the franchisee's ability to recoup their investment or exit the business when desired. This clause also extends to situations involving the franchisee's death or disability, as Section 7.3 stipulates the same transfer conditions apply.
In the context of an LLC Operating Agreement, the transfer of an interest in the LLC requires the express written consent of the manager of the LLC and more than 75% of the percentage interests. If a member attempts to transfer their units without this consent, the transfer will be deemed invalid. This requirement provides Marble Slab Creamery with significant control over who becomes a member of the LLC and operates the franchise.
It is important for potential Marble Slab Creamery franchisees to carefully consider this transfer restriction and discuss it with the franchisor to understand the potential implications and any factors that might influence their decision to approve or deny a transfer request. Understanding Marble Slab Creamery's criteria, even if not explicitly stated, is crucial for franchisees planning their long-term business and exit strategies.