Is Mr. Sandless allowed to assign the Franchise Agreement?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY | |
|---|---|---|---|
| j. | Assignment of contract by franchisor | 21.1 | We have the unconditional right to assign the Franchise Agreement and our obligations in whole or in part at our discretion. |
| k. | "Transfer" by franchisee – defined | 21.2 | If you are a partnership, corporation or limited liability company, the term "assignment" includes the transfer of any interest in the partnership, corporation or limited liability company. "Assignment" also includes the pledge or mortgage of any rights under the Franchise Agreement as security for any obligation. |
| l. | Franchisor approval of transfer by franchisee | 21.3 | You may not transfer any of your rights or obligations under the Franchise Agreement without having first received our written approval. |
| m. | Conditions for franchisor approval of transfer | 21.3 | Conditions include: you must have met all of your monetary and non-monetary obligations to us and our affiliates; buyer qualifies; buyer upgrades the Business to conform with our then-current requirements; you provide us with a copy of the signed agreement of sale; the buyer satisfactorily completes all required training; you provide the buyer with required documents related to your Business; you sign release; buyer signs Franchise Agreement and required guaranties; payment to us of the required transfer fee; buyer obtains required permits and licenses; transfer is made in compliance with all applicable laws; purchase price and terms are not overly burdensome on the buyer; we have provided the buyer with our then-current disclosure document |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, Mr. Sandless has the right to assign the Franchise Agreement. Specifically, Mr. Sandless has the unconditional right to assign the Franchise Agreement and its obligations, either in whole or in part, at its discretion.
However, if a franchisee is a partnership, corporation, or limited liability company, the term "assignment" includes the transfer of any interest in the business entity. It also covers the pledge or mortgage of any rights under the Franchise Agreement as security for any obligation. This means any change in ownership or securing debt with the franchise rights is considered an assignment.
If a franchisee wants to transfer their rights or obligations under the Franchise Agreement, they must first obtain written approval from Mr. Sandless. Several conditions must be met for Mr. Sandless to approve the transfer, including the franchisee meeting all monetary and non-monetary obligations, the buyer qualifying, the buyer upgrading the business to current standards, providing Mr. Sandless with a copy of the sale agreement, the buyer completing training, providing the buyer with necessary business documents, signing a release, the buyer signing the Franchise Agreement and guarantees, payment of a transfer fee, obtaining necessary permits and licenses, compliance with laws, and ensuring the purchase terms are not overly burdensome for the buyer. Mr. Sandless must also provide the buyer with the current disclosure document.