What happens if a Monicals Pizza franchisee refuses to assign the franchise after the death of an owner?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
apacity
18.6.1 Upon the death or Incapacity of Franchise (if Franchisee is an individual) or any holder of a legal or beneficial interest in Franchisee (if Franchisee is a business entity), the appropriate representative controlling such person (whether administrator, personal representative or trustee) shall, within a reasonable time not exceeding one hundred eighty (180) days following such event, transfer such individual's interest in the Franchised Restaurant or in the Franchise Operating Entity to a third party who is either (a) another Franchisee and/or owner of the Franchise Operating Entity or (b) approved by Franchisor. Such transfers, including transfers by will or inheritance, shall be subject to the conditions for assignments and transfers contained in this Agreement, unless prohibited by the laws of the state where such individual resided, provided that the foregoing provision regarding governing law shall be applicable only for this Section 18.6. During such one hundred eighty (180) day period, the Franchised Restaurant must remain at all times under the primary management of a Designated Manager who otherwise meets Franchisor's management qualifications.
18.6.2 Following such a death or Incapacity of such person as described in this Section 18.6, if necessary in Franchisor's discretion, Franchisor shall have the right, but not the obligation, to assume operation of the Franchised Restaurant until the deceased or incapacitated owner's interest is transferred to a third party approved by Franchisor. Franchisor may charge a management fee as stated in the Confidential Operations Manual from time to time, currently equal to FIVE HUNDRED DOLLARS ($500.00) per day, and Franchisor shall further be entitled to reimbursement of any expenses Franchisor incurs that are not paid out of the operating cash flow of the Franchised Res
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Monicals Pizza addresses the transfer of a franchise upon the death or incapacity of a franchisee. Within 180 days of the event, the representative of the deceased or incapacitated individual must transfer the interest in the Monicals Pizza restaurant to a third party. This third party must be either another franchisee/owner or someone approved by Monicals Pizza. The transfer is subject to the standard conditions for assignments and transfers outlined in the franchise agreement. During this 180-day period, a designated manager meeting Monicals Pizza's qualifications must manage the restaurant.
If the necessary transfer isn't made, Monicals Pizza has the option to step in and assume operations of the restaurant until a transfer to an approved third party occurs. If Monicals Pizza chooses to operate the restaurant, they can charge a management fee, which is currently $500 per day, as detailed in the Confidential Operations Manual. Additionally, Monicals Pizza is entitled to reimbursement for any expenses incurred during their operation that aren't covered by the restaurant's operating cash flow.
While the FDD outlines the procedure and Monicals Pizza's rights in the event of death or incapacity, it does not explicitly state the consequences if the representative refuses to assign the franchise. It is important for a prospective franchisee to clarify with Monicals Pizza what specific actions or penalties would be enforced if the representative fails to comply with the required transfer of the franchise within the given timeframe.