Must Mr. Sandless receive an executed agreement of sale between the franchisee and the buyer as a condition of transfer?
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)
The 2025 Franchise Disclosure Document for Mr. Sandless does not explicitly state that an executed agreement of sale between the franchisee and the buyer is a mandatory condition for transfer. However, it does outline several requirements that must be met for a transfer to be approved.
These requirements include the franchisee's execution of a general release of all claims against Mr. Sandless, the buyer's execution of the then-current Single Unit Franchise Agreement (and a personal guaranty if the buyer is a business entity), payment of a transfer fee ($5,000 for a Mr. Sandless Business or a combination Mr. Sandless Business, or $1,000 per owner), and satisfaction of Mr. Sandless's requirements for corporations or limited liability companies if the buyer is one. The buyer must also obtain and maintain all necessary permits and licenses, and the transfer must comply with all applicable laws.
Furthermore, Mr. Sandless must find that the purchase price and terms of the proposed transfer are not overly burdensome to the buyer. While an agreement of sale is not explicitly mentioned, the franchisor retains considerable discretion to assess the overall financial viability of the transfer and its impact on the future operation of the Mr. Sandless business. A prospective franchisee should clarify with Mr. Sandless whether submitting the agreement of sale is implicitly required to demonstrate the financial terms of the transfer.