PRE-CONDITIONS TO FRANCHISEE'S ASSIGNMENT Clause Samples
The 'Pre-Conditions to Franchisee's Assignment' clause defines the specific requirements that a franchisee must satisfy before transferring their rights or interests under the franchise agreement to another party. Typically, these pre-conditions may include obtaining the franchisor's written consent, ensuring the assignee meets certain financial or operational qualifications, and fulfilling all outstanding obligations under the agreement. By establishing these prerequisites, the clause helps the franchisor maintain control over who operates the franchise, thereby protecting the brand's integrity and ensuring continuity of standards.
PRE-CONDITIONS TO FRANCHISEE'S ASSIGNMENT. FRANCHISEE shall not sell, transfer or assign its rights under this Agreement, or any interest in it, or any part or portion of the business entity that owns it, or a substantial portion of the assets used in connection therewith, unless FRANCHISEE and the transferee obtain GREASE MONKEY's prior written consent and comply with the following:
a. FRANCHISEE shall pay all amounts due and owing to GREASE MONKEY.
b. The proposed transferee must be qualified to become a franchisee and shall be evaluated for approval by GREASE MONKEY, based on the same criteria as is currently being used to assess new franchisees of GREASE MONKEY.
c. The proposed transferee shall execute a written assumption of this Agreement, or at the option of GREASE MONKEY, a franchise agreement and related agreements in a form then currently offered by GREASE MONKEY, the term of which shall end on the expiration date of this Agreement and supersede this Agreement in all respects. If a new franchise agreement is signed, the terms thereof may differ from the terms of this Agreement. The transferee will not be required to pay any additional initial franchise fee.
d. FRANCHISEE must execute a general release, in a form satisfactory to GREASE MONKEY, of any and all claims against GREASE MONKEY and affiliated companies and their respective officers, directors, employees and agents arising up to the effective date of the transfer.
e. FRANCHISEE or the proposed transferee shall pay a transfer fee in the amount of $5,000.
f. FRANCHISEE shall give written notice to GREASE MONKEY of the proposed transfer 30 days prior to the proposed transfer date. The notice shall include disclosure of all material terms and conditions of the proposed transaction and an executed agreement with the proposed transferee, together with such information about the proposed transferee as shall be necessary for GREASE MONKEY to assess the qualifications of the proposed transferee to become a GREASE MONKEY franchisee. Any purchase agreement or other agreement entered into by FRANCHISEE for the sale or transfer of the Franchised Business or other interest in the Franchise shall include in its terms that the sale or transfer is conditional upon and subject to GREASE MONKEY's right of first refusal, described in Section 13.4 below, and GREASE MONKEY's right to approve the sale or transfer in accordance with this Agreement.
g. Written evidence shall be submitted from FRANCHISEE's landlord, if applicable, that the landlord will con...
PRE-CONDITIONS TO FRANCHISEE'S ASSIGNMENT. If Franchisee or any Owner desires to make a Transfer, such person or Entity must comply with the following terms, conditions, and procedures to effectuate a valid Transfer:
(a) If any proposed assignment of any rights under this Agreement, or if any other Transfer which, when aggregated with all previous Transfers, would in the reasonable opinion of Big O, result in the transfer of fifty percent (50%) or more of the voting and Equity interest of the ownership of the Premises or Franchisee or the Franchised Business ("Change in Control"):
(i) The transferee must apply for a Big O franchise and must meet all of Big O's then current standards and requirements for becoming a Big O franchisee (which standards and requirements need not be written);
(ii) The transferee or Franchisee shall, at Big O's election, execute the then current form of Franchise Agreement generally being offered to franchisees in the State in which the Big O Store is located. Such agreement shall generally provide for a new term equal to the term of the standard Big O franchise agreement then being offered, and may include, without limitation, different fee structures, modified Trade Areas and/or increased fees;
(iii) Notwithstanding the foregoing, Big O or its assignee may, within thirty (30) days after receipt of notice as provided in SECTION 18.04(B)(I), below, elect the Option to purchase the interest being offered by Franchisee or any Owner; and
(iv) The transferee or Franchisee shall, at Big O's election, have obtained prior to the Transfer a surety bond or letter of credit in an amount not less than $10,000 (or such other amount as designated by Big O from time to time) per each Big O Store which is subject to the Transfer issued by a surety company or bank reasonably acceptable to Big O in favor of Big O or, at Big O's election, to the Local Group designated by Big O, which surety bond or letter of credit may not be revoked, terminated or modified until two years (or such other time period as designated by Big O from time to time) after the date of the Transfer. Such bond or letter of credit shall be payable to the order of Big O or the Local Group, as the case may be, for any nonpayment by the transferee or Franchisee of contributions due to the National Advertising Program or the Local Fund pursuant to the Franchise Agreement to which the transferee or Franchisee is a party; or
(b) Regardless of the degree of control which would be affected by a proposed Transfer:
(i) Franchisee...