Does the definition of 'Transfer' by a Monicals Pizza franchisee include the transfer of the franchised restaurant's assets?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
| k. "Transfer" by franchisee-definition | Section 18.2 | "Transfer" includes transfer of an interest in the franchise, the Franchise Agreement, the franchised restaurant's assets. | | l. Franchisor's approval | Section 18.2 | You may not transfer your interest in any of the | | of transfer by | | items listed in (k) above without our prior written | | franchisee | | consent. | | m. Conditions for franchisor's approval of transfer | Section 18.2 and Exhibit 6 | We will consent to a transfer if: we have not exercised our right of first refusal; all obligations owed to us are paid; you and the transferee have signed a General Release; the prospective transferee meets our business and financial standards; the transferee and all persons owning any interest in the transferee sign the then current franchise agreement (any franchisee holding a franchise agreement on | | Provision | Section in Franchise or Other Agreement | Summary | |-----------------------------------------------------------------------------------------------|--------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | April 1, 2008 may on one occasion transfer that | | | | franchise agreement to a transferee who shall then | | | | be entitled to retain, for so long as that transferee | | | | holds a franchise agreement from us, the 4% royalty | | | | rate in effect on April 1, 2008. All of the other | | | | terms and provisions of the then current Franchise | | | | Agreement [as of the date of the transfer] shall be | | | | fully effective against the transferee); you provide | | | | us with a copy of all contracts and agreements | | | | related to the transfer; you or the transferee pay a | | | | transfer fee of $10,000; the transferee or the owners | | | | of transferee have agreed to be personally bound by | | | | all provisions of the Franchise Agreement; you have | | | | agreed to guarantee performance by the transferee, | | | | if requested by us; the transferee has obtained all | | | | necessary consents and approvals of third parties; | | | | the transferee or all of its equity owners have signed | | | | a Nondisclosure and Non-Competition Agreement; | | | | the transferee has agreed that its designated manager | | | | will complete the initial training program before | | | | assuming management of the franchised restaurant; | | | | and the transferee has obtained all necessary types | | | | of insurance.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 32–41)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the definition of "Transfer" by a franchisee does include the transfer of the franchised restaurant's assets. Specifically, the FDD states that "Transfer" includes transfer of an interest in the franchise, the Franchise Agreement, and the franchised restaurant's assets.
This definition is important for prospective franchisees because it clarifies that any sale, assignment, or other conveyance of the restaurant's physical assets is considered a transfer under the Franchise Agreement. As such, it is subject to Monicals Pizza's approval and other transfer conditions.
Monicals Pizza requires prior written consent for any transfer of the items listed in the definition. This means a franchisee cannot sell their restaurant, franchise rights, or assets without first obtaining permission from Monicals Pizza. The FDD outlines conditions for Monicals Pizza's approval of a transfer, including payment of obligations, signing of a General Release, the transferee meeting business and financial standards, and payment of a $10,000 transfer fee. These stipulations ensure that Monicals Pizza maintains control over who operates its franchises and that the brand's standards are upheld.
Prospective franchisees should carefully review Item 17 of the FDD to fully understand the implications and requirements related to transferring a Monicals Pizza franchise. Understanding these conditions is crucial for planning an exit strategy or any potential sale of the business in the future.