Does the Punch King Fitness Franchise Agreement specify any exceptions related to the transfer of the franchise?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
| p. | Your death or disability | Section XVI(E) | Must transfer to an approved 3rd party within 6 months, subject to all conditions except the transfer fee. | n. | Our right of first refusal to acquire your business | Section XVI(D) | We have the right, exercisable by written notice to you, to purchase such rights or interests for the price and on the terms and conditions of any offer for your Franchised Business, except we may substitute equivalent cash for any form of payment proposed in such offer. Any purchase by us must be completed within ninety (90) days after your receipt of our written notice. If we do not exercise our right of first refusal, you may complete the sale of interest to the bona fide purchaser, subject to our approval; however, if the sale to the purchaser is not completed within one hundred twenty (120) days after the delivery of the offer to us, we will again have the right of first refusal.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–53)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, there are specific conditions and exceptions related to the transfer of a franchise. Generally, Punch King Fitness has the right to approve all transfers, but they cannot unreasonably withhold consent.
A key exception arises in the event of the franchisee's death or disability. In such cases, the franchise must be transferred to an approved third party within six months. This transfer is subject to all standard conditions for transfer, except for the transfer fee. This provision ensures business continuity while still requiring the transferee to meet Punch King Fitness's standards.
Additionally, the franchisor has a right of first refusal to acquire the franchisee's business. If the franchisee receives an offer to purchase their franchise, Punch King Fitness can exercise its right to purchase the business at the same price and terms, substituting equivalent cash for any proposed form of payment. If Punch King Fitness chooses not to exercise this right and the sale to the purchaser is not completed within 120 days, Punch King Fitness will again have the right of first refusal.