Under what conditions can Monicals Pizza refuse a transfer of ownership of a franchise in Michigan?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
hisor from exercising a right of first refusal to purchase the franchise. Good cause shall include, but is not limited to: - The failure of the proposed transferee to meet the Franchisor's then-current reasonable qualifications or standards. - The fact that the proposed transferee is a competitor of the Franchisor or Subfranchisor. - The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
- The failure of the Franchisee or proposed transferee to pay any sums owing to the Franchisor or to cure any default in the Franchise Agreement existing at the time of the proposed transfer.
- A provision that requires the Franchisee to resell to the Franchisor items that are not uniquely identified with the Franchisor. This subdivision does not prohibit a provision that grants to a Franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the Franchisor the right to acquire the assets of a franchise for the market or appraised value and has failed to cure the breach in the manner provided in ITEM 17(g).
- A provision that permits the Franchisor to directly or indirectly convey, assign or otherwise transfer its obligations to fulfill contractual obligations to the Franchisee unless a provision has been made for providing the required contractual services.
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- If the Franchisor's most recent financial statements are unaudited and show a net worth of less than $100,000.00 the Franchisee may request the Franchisor to arrange for the escrow of initial investment and other funds paid by the Franchisee until the obligations, if any, of the Franchisor to provide real estate, improvements, equipment, inventory, training or other items included in the franchise offering are fulfilled. At the option of the Franchisor, a surety bond may be provided in place of escrow.
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- THE FACT THAT THERE IS A NOTICE OF THIS OFFERING ON FILE WITH THE ATTORNEY GENERAL DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENFORCEMENT BY THE ATTORNEY GENERAL.
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- Any questions regarding this notice should be directed to:
State of Michigan Consumer Protection Division Attention: Franchise Bureau 670 Law Building Lansing, MI 48913 (517) 373-3800
FOR THE STATE OF MINNESOTA
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- ITE
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, specifically Item 23 concerning receipts, there are several conditions under which Monicals Pizza can refuse a transfer of a franchise in Michigan. These conditions are considered "good cause" for refusal.
Monicals Pizza may refuse a transfer if the proposed transferee does not meet the company's current qualifications or standards. This ensures that any new franchisee maintains the brand's quality and operational standards. Additionally, Monicals Pizza can refuse a transfer if the proposed transferee is a competitor, preventing potential conflicts of interest and protecting proprietary information. The company can also refuse if the transferee is unwilling to agree in writing to comply with all lawful obligations, ensuring adherence to the franchise agreement and relevant laws.
Furthermore, Monicals Pizza can refuse a transfer if either the franchisee or the proposed transferee has outstanding payments or is in default of the Franchise Agreement at the time of the proposed transfer. This protects Monicals Pizza from financial risks associated with a non-compliant franchisee. The document also states that the subdivision does not prevent Monicals Pizza from exercising a right of first refusal to purchase the franchise.
It is important to note that any questions regarding the notice should be directed to the State of Michigan Consumer Protection Division. This indicates that the state government oversees franchise operations and provides a resource for prospective franchisees to address concerns or seek clarification.