Is Mr. Sandless obligated to accept the transfer of any of the franchisee's interest in any matter under the agreement?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
onmonetary obligations under this Agreement and any other agreement between you and us or our affiliates;
21.3.2 The buyer having met our qualifications for new franchisees;
- 21.3.3 The buyer's upgrade of the Business to conform with our then-current specifications;
- 21.3.4 We are provided with an executed agreement of sale between you and the buyer;
- 21.3.5 The buyer's successful completion of our training program as stated in Section 4.1;
- 21.3.6 The buyer's receipt of your last year's business tax return and other documents relevant to your Business;
- 21.3.7 Your execution (or your principals' execution, as applicable) of a general release, in a form prescribed by us, of all claims against us and our officers, directors, agents, and employees. Notwithstanding such release, you shall remain obligated under those provisions of this Agreement that expressly extend beyond the term hereof;
- 21.3.8 The buyer's execution of our then-current Single Unit Franchise Agreement as well as execution of a personal guaranty if a partnership, corporation or limited liability company;
- 21.3.9 Payment to us of a transfer fee in the amount of (a) Five Thousand Dollars ($5,000) per owner no matter how many businesses you are transferring, if the transfer is of a Mr. Sandless Business or a combination Mr. Sandless Business; or (b) One Thousand Dollars ($1,000) per owner no matter how many businesses you are transferring;
- 21.3.10 If the buyer is a corporation or limited liability company, the corporation's or limited liability company's satisfaction of our requirements for such entities as set forth in Section 21 (except Section 21.6) below. In addition, we must approve all shareholders of a corporation transferee, or all members and managers of a limited liability company transferee. We may require that a particular individual remain the owner of at least fifty-one percent (51%) of the outstanding stock of a franchisee corporation, or retain an interest of at least fifty-one percent (51%) in the limited liability company, as applicable, and serve as the corporation's chief executive officer or the limited liability com
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, Mr. Sandless is not obligated to accept the transfer of a franchisee's interest. Instead, the FDD outlines specific conditions that must be met for Mr. Sandless to approve a transfer. These conditions ensure that the new franchisee meets Mr. Sandless's standards and that the transfer does not negatively impact the Mr. Sandless business.
Specifically, if the buyer is a corporation or limited liability company, they must meet Mr. Sandless's requirements for such entities, with the exception of Section 21.6. Mr. Sandless must also approve all shareholders of a corporation transferee, or all members and managers of a limited liability company transferee. Mr. Sandless may also require that a particular individual remain the owner of at least 51% of the outstanding stock of a franchisee corporation, or retain an interest of at least 51% in the limited liability company, and serve as the corporation's chief executive officer or the limited liability company's manager.
Furthermore, the transfer must comply with all applicable laws, including state and federal laws governing the offer and sale of franchises. The purchase price and terms of the proposed transfer must not be so burdensome to the buyer as to impair or materially threaten its future operation of the Business and performance under its franchise agreement. The buyer must also execute Mr. Sandless's then-current Single Unit Franchise Agreement, as well as a personal guaranty if a partnership, corporation, or limited liability company. The franchisee (or their principals) must also execute a general release of all claims against Mr. Sandless and its officers, directors, agents, and employees. Finally, the buyer must pay Mr. Sandless a transfer fee of $5,000 per owner if the transfer is of a Mr. Sandless Business or a combination Mr. Sandless Business, or $1,000 per owner if it is another type of transfer.