Under what conditions can Pearce Bespoke refuse a transfer of ownership of a franchise?

r effective until Franchisor has received the legal documents which its legal counsel deems necessary to properly document such transfer or assignment.

C. Conditions to Other Transfer or Assignment.

Pearce Bespoke Franchisee (and its partners and shareholders, if any) will not transfer (whether voluntary or

involuntary), assign or otherwise dispose of, in one or more transactions, Franchisee's business, all or substantially all of the assets of Franchisee's business, this Agreement or any controlling interest in Franchisee (a "controlling" interest will include a proposed transfer of fifty percent (50%) or more of the Capital Stock of a corporate Franchisee) without Franchisor's prior written consent, except to trusts established for Franchisee's benefit. Franchisor will not unreasonably withhold its consent to a transfer, subject to any or all of the following conditions described below which Franchisor may deem necessary:

• 1. All of Franchisee's accrued monetary obligations to Franchisor and suppliers will have been satisfied, and Franchisee is not in default under this Agreement;
• 1. Franchisee executes a written agreement in a form satisfactory to Franchisor, in which Franchisee covenantsto observe all applicable post-term obligations and covenants contained in this Agreement;
• 1. The transferee-franchisee enters into a written agreement in a form satisfactory to Franchisor assuming and agreeing to discharge all of Franchisee's obligations and covenants under this Agreement for the remainder of its term or, at Franchisor's option, executes Franchisor's then-current standard form of franchise agreement which may not contain any further rights of renewal, but may contain royalty rates and advertising contributions (which may be different than those contained in this Agreement), and an altered Franchised Territory;
• 1. The transferee-franchisee is not a competitor of Franchisor or the Business system and is approved by Franchisor and demonstrates to Franchisor's satisfaction that he/she meets Franchisor's managerial, financial, and business standards for new franchisees, possesses a good business reputation and credit rating, and has the aptitude and ability to conduct the franchised business. Franchisee understands that Franchisor may communicate directly with the transferee-franchisee during the transfer process to respond to inquiries, as well as to ensure that the transferee-franchisee meets Franchisor's qualifications;
• 1. While Franchisor does not determine the purchase price, Franchisor may determine that the purchase price and payment terms will adversely affect the transferee-franchisee's operation of the Pearce Bespoke Franchise;
• 1. If Franchisee finances any part of the purchase price, Franchisee agrees that all of the transferee franchisee's obligations under any promissory notes, agreements, or security interests reserved in the Pearce Bespoke Franchise are subordinate to the transfereefranchisee's obligations to pay Royalty Fees or any other amounts due to Franchisor under the Franchise Agreement;
• 1. The transferee-franchisee successfully completes Franchisor's training program; and Franchisee pays Franchisor a transfer fee equal to the greater of (i) Ten Thousand Dollars ($10,000.00), or (ii) twenty five percent (2

Source: Item 22 — CONTRACTS (FDD page 39)