When transferring a Monicals Pizza franchise, must the transferee and holders of legal/beneficial interest agree to be personally bound by the franchise agreement?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.2.9 the transferee, and all holders of a legal or beneficial interest in any entity that is to be a Franchise Operating Entity, have agreed to be personally bound jointly and severally by all provisions of this Agreement for the remainder of its term;
- 18.2.10 Franchisee has agreed to be bound to the obligations of the new franchise agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor;
- 18.2.11 the transferee has obtained all necessary consents and approvals from third parties and all applicable federal, state and local laws, rules, ordinances and requirements applicable to the transfer have been complied with or satisfied;
- 18.2.12 the transferee has, and if the transferee is to be a Franchise Operating Entity, all of the holders of a legal and beneficial interest in the transferee have executed and delivered to Franchisor a Nondisclosure and Non-Competition Agreement;
- 18.2.13 the transferee agrees that its Designated Manager shall complete, to Franchisor's satisfaction, a training program in substance similar to the initial training described in Section 8.1 prior to assuming the management of the day-to-day operation of the Franchised Restaurant; and both Franchisee and the transferee have satisfied Franchisor that the Franchised Restaurant shall continue to be operated by a properly trained Designated Manager until such time as the transferee's Designated Manager shall have completed the necessary training; and
- 18.2.14 the transferee has
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, when transferring a franchise, the transferee and all holders of a legal or beneficial interest in any entity that is to be a Franchise Operating Entity must agree to be personally bound, jointly and severally, by all provisions of the Franchise Agreement for the remainder of its term. This requirement is one of several conditions that must be met for a transfer to be approved.
This means that anyone taking over a Monicals Pizza franchise, along with those who have a legal or beneficial interest in the business entity operating the franchise, must commit to upholding all the terms of the existing franchise agreement. This ensures that Monicals Pizza maintains consistent standards and practices across all its franchise locations, even when ownership changes.
In addition to agreeing to be personally bound by the franchise agreement, the transferee must also complete a training program similar to the initial training, pay a transfer fee of $10,000, execute a General Release, and provide Monicals Pizza with copies of all contracts related to the transfer. Franchisee must also agree to be bound to the obligations of the new franchise agreement and guarantee the full performance thereof by the transferee, if required by Monicals Pizza.