TRANSFERABILITY OF INTEREST. A. This Agreement and all rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to the benefit of Franchisor's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall: (i) at the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly assume and agree to perform such obligations. B. Franchisee shall not transfer, sell or assign fifteen percent (15%) or more of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor. C. The rights and duties of Franchisee as set forth in this Agreement, and the franchise herein granted, are personal to Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, to any part of Franchisee's interest in this Agreement may sell, assign, transfer, convey, give away, pledge, mortgage or otherwise encumber any interest in this Agreement or in the franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part of the operating control of the business of Franchisee, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor. D. If Franchisee desires to sell or transfer all or any part of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions: 1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied. 2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law. 3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business. 4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement. 5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee. 6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise. E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise) F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor. G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements: 1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business. 2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof. 3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent. 4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor. 5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement. 6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement. 7. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, shall be promptly furnished to Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoption. 8. The term of the transferred franchise shall be the unexpired term of this Agreement. 9. Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business shall not constitute a waiver of any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement. H. Franchisor may, without liability of any kind or nature whatsoever to Franchisee, make available for inspection by any intended transferee of Franchisee all or any part of Franchisor's records relating to this Agreement, the Franchised Business, or to the history of the relationship of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee. I. Franchisee shall not , without prior written consent of Franchisor, place in, on or upon the location of the Franchised Business, or in any communication media, any form of advertising relating to the sale of the Franchised Business or the rights granted hereunder.
Appears in 2 contracts
Sources: Franchise Agreement (YTB International, Inc.), Franchise Agreement (YTB International, Inc.)
TRANSFERABILITY OF INTEREST. A. This Agreement Franchisee understands and all rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to acknowledges that the benefit of Franchisor's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall: (i) at the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly assume and agree to perform such obligations.
B. Franchisee shall not transfer, sell or assign fifteen percent (15%) or more of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee as set forth in this Agreement, and the franchise herein granted, Agreement are personal to Franchisee, and that Franchisor has agreed to enter into granted this contract with Franchisee franchise in reliance upon Franchisee's personal skill on the business skill, financial capacity, and financial abilitycharacter of Franchisee and its general partners, controlling shareholders or controlling individuals. Franchisee shall retain ownership of the Hotel except as may be otherwise approved by Franchisor in writing. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, remote successor to any part of Franchisee's ’s interest in this Agreement may franchise, or any individual, partnership, corporation, or other legal entity that directly or indirectly owns or controls any interest (other than interests of limited partners) in this franchise or in Franchisee, shall sell, assign, assign (collaterally or otherwise) transfer, convey, give awaymortgage, pledge, mortgage grant a security interest or otherwise encumber (each, a “Transfer”) any direct or indirect interest in this Agreement or in the franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part of the operating control of the business of Franchisee, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor.
D. If Franchisee desires to sell or transfer all or any part of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor (including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement.
7. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, shall be promptly furnished to Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoption.
8. The term of the transferred franchise shall be the unexpired term of this Agreement.
9. Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business shall not constitute a waiver of Franchisee or any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of controlling (greater than 15%) interest in any kind or nature whatsoever to entity that controls Franchisee, make available for inspection by any intended transferee but excluding interests of Franchisee all or any part limited partners, if any), and no Transfer of Franchisor's records relating to this Agreement, the Franchised Business, or to the history a substantial portion of the relationship assets (including building and real estate) of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee Franchised Business shall not , occur without the prior written consent of Franchisor. Except as otherwise provided in this Section XV and Section XVI., place inany Transfer addressed in the immediately preceding sentence, on by operation of law, sale of stock or upon otherwise, not having the location prior written consent of Franchisor will be a material default under this Agreement giving Franchisor the right to terminate this Agreement pursuant to Paragraph XVII.B.4. and seek injunctive relief as well as monetary damages. Notwithstanding anything to the contrary in this Agreement, Franchisor shall have the right to withhold its consent to any Transfer of any interest in this Agreement, Franchisee or any entity that controls Franchisee if Franchisee is in default hereunder.
B. Except as prohibited under Paragraph XX.F., Franchisor shall not require approval of the Transfer of all or any part of the assets of the Franchised Business (excluding this franchise, this Agreement, and any stock, partnership or other interests in Franchisee) to banks or other lending institutions that are not a Competitor (as defined herein) or an Affiliate of a Competitor for purposes of any refinancing or as collateral securing a loan made directly to or for the benefit of the Franchised Business.
C. Subject to Paragraph XV.D, Franchisor shall not unreasonably withhold its consent to a Transfer of any interest in this franchise, Franchisee, this Agreement, the Franchised Business, or in any communication media, any form a substantial portion of advertising relating to the sale assets (including building and real estate) of the Franchised Business Business; provided, however, if a Transfer, alone or together with other previous, simultaneous or proposed Transfers, would result in the Transfer of a controlling interest (as reasonably determined by Franchisor) in this franchise, Franchisee, the entity that controls Franchisee, this Agreement, or the rights granted hereunderFranchised Business, or substantially all of the assets (including building and real estate) of the Franchised Business, Franchisor may, in its sole discretion, require any or all of the following as a condition of its approval:
1. Franchisee shall satisfy all of Franchisee’s accrued monetary obligations to Franchisor, its subsidiaries and Affiliates, and shall execute a general release in a form prescribed by Franchisor of any and all claims against Franchisor, its subsidiaries and Affiliates, and their respective officers, directors, agents and employees;
2. Franchisee shall provide Franchisor with a true and complete copy of the purchase and sale agreement or similar document covering the transaction;
3. the proposed transferee shall submit to Franchisor an application, in the form prescribed by Franchisor, for a new franchise agreement to replace this Agreement for its unexpired term, and shall pay to Franchisor a transfer fee (which fee shall be refunded, less Ten Thousand Dollars ($10,000) to cover Franchisor’s cost of processing the application, in the event the application is disapproved). The amount of the transfer fee shall be equal to the amount of the application fee then being charged by Franchisor per room for System franchises for new development multiplied by the number of rooms in the Hotel or the minimum amount per hotel then being charged by Franchisor for System franchises for new development, whichever amount is greater. In the event that the Transfer involves multiple hotels, must be completed within a short timeframe, or involves other complications such that Franchisor determines in its Reasonable Business Judgment that it is necessary to obtain outside counsel to complete the Transfer, Franchisor shall have the right to require Franchisee to pay its outside counsel fees in connection with such Transfer. If, prior to the submission of an application, Franchisee desires Franchisor to review the Hotel to determine the renovations necessary to bring the Hotel into good repair and to conform the Hotel to Franchisor’s then current standards to transfer, Franchisor may charge its then current Property Improvement Plan (“PIP”) fee (currently, Five Thousand Dollars ($5,000)) to cover Franchisor’s costs associated with such PIP and consent review under this Paragraph XV.
Appears in 2 contracts
Sources: Franchise Agreement, Franchise Agreement (Apple REIT Seven, Inc.)
TRANSFERABILITY OF INTEREST. A. This Franchise Agreement and all rights hereunder can hereunder, including but not limited to TA's right of first refusal set forth in Section XXI herein, may be assigned and transferred by Franchisor TA and, if soso assigned, shall be binding upon and inure to the benefit of FranchisorTA's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall: (i) at the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly assume and agree to perform such obligations.
B. Franchisee shall not transfer, sell or assign fifteen percent (15%) or more During the term of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee as set forth in this Franchise Agreement, and the franchise herein granted, are personal to Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability. Accordingly, neither Franchisee nor any successor Franchisee Party may, without the prior written consent of FranchiseeTA, either immediate or remote, to any part of Franchisee's interest in this Agreement may sell, assign, transfer, convey, give away, pledge, mortgage or otherwise encumber any interest in this Agreement or in the franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, sell, assign or encumbrance of transfer: (i) all or any part of Franchisee's rightsor any Franchisee Party's interest in or rights under this Franchise Agreement or the TA Franchise granted hereby; (ii) all or any part of any Franchisee Party's interest in Franchisee (or its interest in any partnership, corporation or of other entity that has an interest in Franchisee); (iii) all or any part of Franchisee's company under this Agreement, or of any Franchisee Party's interest in any entity which leases property (real or personal) to Franchisee; or (iv) all or any part of the operating control of the business substantially all of Franchisee's assets. Within thirty (30) days of TA's receipt of a written request for consent to a sale, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor.
D. If Franchisee desires to sell assignment or transfer all described above, TA shall advise Franchisee in writing that either: (a) it consents to the proposed sale, assignment or any part transfer; (b) it does not consent to the proposed sale, assignment or transfer; or (c) it consents to the proposed sale, assignment or transfer subject to and provided that Franchisee complies, to TA's satisfaction, with certain terms or conditions. Among other things, TA may require as a condition of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transactiona sale, which consent will be conditioned upon the satisfaction of the following conditionsassignment or transfer, that:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business transferee(s) shall be of good moral character and reputation, shall have business expertise, shall have liquid assets, a financial net worth and credit rating acceptable to TA and shall meet TA's then-current standards for new franchisees;
2. Franchisee shall have fully paid and satisfied.
2. Unless prohibited by the law satisfied all of Franchisee's obligations to TA as of the state where date of transfer;
3. the Franchise is located, transferee or Franchisee shall pay to TA a non-refundable transfer fee equal to TWENTY-FIVE percent (25%) of the franchisee fee currently charged by TA for new franchises;
4. the transferee(s) (or such individual(s) who will be the actual manager of the TA Franchise) shall have executed successfully completed and passed the training course then in effect for franchisees, or otherwise demonstrated to TA's satisfaction, sufficient ability to operate the Franchised Facility being transferred;
5. the transferee(s), including certain key shareholders, officers, directors or personnel of the transferee(s), shall jointly and severally execute any or all of the following at TA's request:
a. a general releasefranchise agreement and other related agreements, including but not limited to a Guaranty, for the unexpired term of this Franchise Agreement, on the standard forms then being used by TA; and
b. a written assignment from Franchisee in a form satisfactory to Franchisor, of any and TA wherein transferee shall assume all claims against Franchisor including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchiseeobligations hereunder.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding each stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent certificate of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity corporation shall have conspicuously endorsed upon the face thereof of it a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Franchise Agreement.;
7. Copies no new shares of voting stock in the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, corporation shall be promptly furnished to Franchisor. Any amendment issued to any such documents shall also be furnished to Franchisor immediately upon adoption.person or entity without obtaining TA's prior written consent; and
8. The term Franchisee, prior to the transfer, shall execute a general release, in a form prescribed by TA, of any and all claims which Franchisee may have as of such date against TA or its affiliates and parents, and their respective officers, directors, agents and employees.
C. During the transferred franchise shall be the unexpired term of this Franchise Agreement.
9. Franchisor's consent to a transfer of , neither Franchisee nor any interest in this Agreement or of any ownership interest in the Franchised Business Franchisee Party shall not constitute a waiver of any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of any kind or nature whatsoever to Franchisee, make available for inspection by any intended transferee of Franchisee encumber all or any part of Franchisor's records relating to its interest in or rights under this Agreement, Franchise Agreement (or the Franchised Business, or to TA Franchise granted hereby) without the history of the relationship of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee shall not , without prior written consent of FranchisorTA; provided, place inhowever, that TA shall consent to a mortgage on the Franchised Facility if the mortgagee agrees, in writing and upon terms acceptable to TA, to subordinate its lien to TA's rights under the Franchise Agreement, including but not limited to any and all rights of first refusal and consent rights provided in this Franchise Agreement.
D. Notwithstanding anything to the contrary herein, no sale, assignment or upon the location transfer, described in paragraph (B) above shall relieve Franchisee or any Franchisee Party of Franchisee's obligations pursuant to this Franchise Agreement, including, but not limited to, any of the Franchised Businessobligations or covenants contained in Section XVI, or unless TA shall expressly release the same in any communication media, any form of advertising relating to the sale of the Franchised Business or the rights granted hereunderwriting.
Appears in 1 contract
TRANSFERABILITY OF INTEREST. A. 21.01. This Agreement and all rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to the benefit of Franchisor's successors and assigns; provided.
21.02. This Agreement and all rights hereunder may be assigned and transferred by Franchisee and, howeverif so, that with respect shall be binding upon and inure to the benefit of Franchisee's successors and assigns, subject to the following conditions and requirements, and Franchisor's right of first refusal as set forth herein:
A. Neither Franchisee nor any Franchisee Party may sell, assign (including, but not limited to, assignments by operation of law) or transfer (collectively, "Assign") this Agreement without Franchisor's prior written consent. Franchisor may condition such consent on, among other things, transferee's completion of Franchisor's then-current training program to Franchisor's satisfaction. Franchisor has an absolute and unqualified right to withhold consent to such proposed Assignments. Any attempt by Franchisee to Assign this Agreement without Franchisor's prior written consent shall be void and of no force and effect. The sale, transfer, transfer by operation of law, or other disposition of Franchisee's interest, or any part thereof, in the Franchised Business, or any Franchisee Party's or other Person's ownership or other interest in Franchisee, if Franchisee is a corporation, partnership or other business entity, shall be an assignment requiring Franchisor's prior written consent. Franchisee's written request for Franchisor's approval of any assignment resulting must be received by Franchisor not less than ninety (90) days prior to the effective date of such requested assignment.
B. Franchisor shall have the preferential right to meet the bona fide offer of any proposed assignee; such right to be exercised by Franchisor within sixty (60) days following the date Franchisor receives a copy of Franchisee's written request for Franchisor's approval of any assignment. Franchisee shall include in such written request the name and address of the proposed assignee and the price, terms, and conditions contained in the subsequent performance bona fide offer. Franchisor's failure to exercise this preferential right shall not terminate this Agreement or the preferential right or release Franchisee from any of its obligations under this Agreement.
C. In the event of sale, transfer, or assignment of this Agreement by Franchisee during the assignee term of this Agreement, or at the functions expiration date of Franchisorthis Agreement, Franchisor will charge Franchisee a Transfer and Training Fee of Twenty-Five Thousand Dollars ($25,000.00) ("Transfer and Training Fee"). Notwithstanding the assignee shall: foregoing, if the transfer or assignment is approved in writing by Franchisor pursuant to Subparagraph A above, and such transfer or assignment is to (i) at the time an immediate family member of such assignmentFranchisee (if Franchisee is an individual), be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and or (ii) expressly assume an immediate family member of a Franchisee Party, or (iii) a principal operator of the Franchised Business, the Transfer and agree to perform such obligationsTraining Fee will not be charged.
B. Franchisee shall not transfer, sell or assign fifteen percent (15%) or more 21.03. During the term of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee as set forth in this Agreement, and the franchise herein granted, are personal to Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, to any part of Franchisee's interest in this Agreement may sell, assign, transfer, convey, give away, pledge, mortgage or otherwise Franchisee Party shall encumber any interest in this Agreement or in the franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part of the operating control of the business of Franchisee, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor.
D. If Franchisee desires to sell or transfer all or any part of its interest in or rights under this Agreement and Franchise, (or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or granted hereby) without the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement.
7. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, shall be promptly furnished to Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoption.
8. The term of the transferred franchise shall be the unexpired term of this Agreement.
9. Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business shall not constitute a waiver of any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of any kind or nature whatsoever to Franchisee, make available for inspection by any intended transferee of Franchisee all or any part of Franchisor's records relating to this Agreement, the Franchised Business, or to the history of the relationship of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee shall not , without prior written consent of Franchisor, place in, on or upon the location of the Franchised Business, or in any communication media, any form of advertising relating to the sale of the Franchised Business or the rights granted hereunder.
Appears in 1 contract
TRANSFERABILITY OF INTEREST. A. 12.01. This Agreement and all rights hereunder can may be assigned and transferred by Franchisor Company and, if so, shall be binding upon and inure to the benefit of FranchisorCompany's successors and assigns; provided.
12.02. Licensee agrees to notify Company in writing:
a. prior to or concurrently with the effective date thereof, however, that with respect as to any assignment resulting change in the subsequent performance legal form of ownership of Licensee (such as, for example, a change from individual or partnership form to corporate form, or vice versa), it being understood that no such change will operate to release from liability to Company any party previously responsible for Licensee's obligations hereunder without the written consent of Company,
b. as promptly as feasible, as to the death of any partner having an interest in any partnership by which Licensee is owned or the assignee death of any stockholder owning 50% or more of the functions voting stock of FranchisorLicensee if Licensee is incorporated, or
c. not less than thirty (30) days prior to the assignee shall: closing of the transaction, as to the name and address of each proposed buyer or transferee in any proposed sale, assignment or transfer of fifty (i) at the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly assume and agree to perform such obligations.
B. Franchisee shall not transfer, sell or assign fifteen percent (1550%) or more of the assets used ownership interest(s) of Licensee or of the business operated at the location of Licensee's business indicated hereinabove or of all of the capital stock (both voting and non-voting) owned by the holder(s) in a corporation owning the Franchised Business business operated at such location if fifty percent (50%) or any ownership interest licensed hereunder without more of the written consent outstanding voting stock of Franchisorsuch corporation is owned by such holder(s).
C. The rights and duties of Franchisee as set forth in this Agreement, and the franchise herein granted, are personal to Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability12.03. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate Licensee shall not transfer or remote, to any part of Franchisee's interest in this Agreement may sell, assign, transfer, convey, give away, pledge, mortgage or otherwise encumber any interest in assign this Agreement or any part hereof without Company's written consent. Licensee shall promptly advise Company in writing of any relocation of its place of business or the franchise granted herebyclosing of any existing place of business. Any purported assignment PARAGRAPH XIII NO AGENCY
13.01. Licensee shall not have authority to represent Company in Licensee's country, the Territory or transferelsewhere as an agent, whether by operation of law nor to bind Company to any contract, representation, understanding, act or otherwise, or encumbrance of all deed concerning Company or any part products sold by it. Neither the making of Franchisee's rights, or this Agreement nor the performance of all or any part of Franchisee's company under this Agreement, or of all or any part of the operating control of the business of Franchisee, provisions hereof shall be null and void and construed to constitute Licensee as an agent or representative of Company for any purpose nor shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice be deemed to establish a joint venture or opportunity to cure, unless such assignment, transfer or encumbrance has partnership between the prior written consent of Franchisor.
D. If Franchisee desires to sell or transfer all or any part of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:
1parties. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited sales of merchandise by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed Licensee shall be for the term specified in such Agreementits own account, it being understood that Licensee is an independent business reselling products which are purchased from Company.
513.02. The transferee Company shall have executed a general releasenot, in a form satisfactory to Franchisor, by virtue of any and all claims against Franchisor and its officersapprovals, directorsadvice or services, shareholders and employeesprovide to Licensee, in their corporate and individual capacities, with respect assume responsibility or liability to any representations regarding the franchise or the business conducted pursuant thereto Licensee or any other matter that may have been made third parties to the transferee by the selling Franchiseewhich Company would not otherwise be subject.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement.
7. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, shall be promptly furnished to Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoption.
8. The term of the transferred franchise shall be the unexpired term of this Agreement.
9. Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business shall not constitute a waiver of any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of any kind or nature whatsoever to Franchisee, make available for inspection by any intended transferee of Franchisee all or any part of Franchisor's records relating to this Agreement, the Franchised Business, or to the history of the relationship of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee shall not , without prior written consent of Franchisor, place in, on or upon the location of the Franchised Business, or in any communication media, any form of advertising relating to the sale of the Franchised Business or the rights granted hereunder.
Appears in 1 contract
TRANSFERABILITY OF INTEREST. A. This Agreement and 22.1 The Franchisor shall have the right to transfer or assign all or any part of its rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to the benefit of Franchisor's successors and assigns; provided, however, that with respect or obligations herein to any assignment resulting in the subsequent performance person or legal entity, provided such person or legal entity agrees to be bound by the assignee all of the functions of Franchisor, the assignee shall: (i) at the time of such assignment, be financially responsible terms and economically capable of performing the obligations of Franchisor hereunder; conditions set forth herein and (ii) expressly agrees to assume and agree to perform such obligationssame.
B. 22.2 Franchisee shall not transfer, sell or assign fifteen percent (15%) or more of understands and acknowledges that the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee as set forth in this Agreement, and the franchise herein granted, Agreement are personal to Franchisee, and that the Franchisor has agreed to enter into granted this contract with Franchisee franchise in reliance upon on Franchisee's business skill, financial capacity, and personal skill and financial abilitycharacter. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, remote successor to any part of Franchisee's interest in this Agreement may franchise nor any individual, partnership, corporation, or other legal entity which directly or indirectly controls Franchisee shall sell, assign, transfer, convey, give away, pledge, mortgage mortgage, or otherwise encumber any interest in this Agreement franchise or in any legal entity which directly or indirectly owns this franchise without the franchise granted herebyprior written consent of the Franchisor, which consent shall be subject to the conditions precedent, but which will not be unreasonably withheld; provided, however, that the Franchisor=s prior written consent shall not be required for a transfer of less than a five percent (5%) interest in a publicly-held corporation. A publicly-held corporation is a corporation registered under the Securities Exchange Act of 1934. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part not having had written consent of the operating control of the business of Franchisee, Franchisor required by this Article XXII shall be null and void and shall constitute a material breach of this Agreement, for which breach the Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent cure pursuant to Article XIX of Franchisorthis Agreement.
D. If Franchisee desires 22.3 The Franchisor shall not unreasonably withhold its consent to sell or a transfer all or of any part of its interest in Franchisee or in this Agreement and Franchisefranchise; provided, however, that if the transfer, alone or together with other previous, simultaneous, or proposed transfers, would have the effect of transferring a controlling interest in the Outlet, either directly or indirectly, the Franchisor may, in its sole discretion, require all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditionsas conditions precedent to its approval:
1. A. All of Franchisee's monetary obligations owed to Franchisor Franchisor, to affiliates, subsidiaries, landlord, vendors and all suppliers shall have been satisfied;
B. Franchisee is not in default of any provision of this Agreement, any amendment hereof or successor hereto, or any other outstanding obligations relating to the Franchised Business shall be fully paid agreement between Franchisee and satisfied.Franchisor;
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee C. The transferor shall have executed a general release, in a form satisfactory to the Franchisor, of any and all claims against the Franchisor including and its officers, directors, shareholders principal shareholders, and employees, in their corporate and individual capacities, including, including without limitation, claims arising under federal, state and local laws, rules rules, and ordinances, provided however, that all rights enjoyed by the transferor and any other matters incident to causes of action arising in its favor from the termination provisions of this Agreement or shall not be released except to the transfer of Franchisee's interest herein or to extent identified in the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by lawrelease.
3. D. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee andshall, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection either (i) enter into a written assignment under seal and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to the Franchisor, assuming and agreeing to discharge all of Franchisee's obligations for the balance of the term of this Agreement; and if the obligations of the Franchisee were guaranteed by the transferor, the transferee, has the option to continue operating under the Franchise Agreement or shall guarantee the performance of all such obligations in writing in a form satisfactory to the Franchisor, or (ii) the transferee shall execute (and/or, upon the Franchisor's request, shall cause all interested parties to execute) for a full new term, the then-current standard form of Franchise Agreement and other ancillary agreements shall as the Franchisor may require for the Outlet, which agreements supersede this Agreement in all respects and the terms of which agreements may differ from the terms of this Agreement; including but not limited to the increase in the CMSF, Advertising Fee, and Proprietary Products fees then being paid by all new franchisees entering the System.
E. The transferee shall demonstrate to the Franchisor=s reasonable satisfaction that it meets the Franchisor=s managerial and business standards; possesses a good moral character, business reputation, and credit rating; has the aptitude and ability to conduct the business franchised herein (as may be evidenced by prior related business experience or otherwise); and has adequate financial resources and capital to operate the business;
F. At the transferee=s expense, the transferee or the transferee's manager shall complete any training programs then in effect for all new franchisees entering the System;
G. At the transferee's expense, the transferee shall upgrade, renovate or remodel the Outlet to conform to the standards then prescribed by the Franchisor of all Outlets under the System, and shall complete such upgrading and other reasonable remodeling or refurbishing requirements within the time reasonably specified by the Franchisor;
H. Franchisee shall remain liable for all of the obligations to the Franchisor in connection with the Outlet prior to the effective date of the transfer and shall execute any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee instruments reasonably requested by the selling FranchiseeFranchisor to evidence such liability.
6. Franchisee shall have provided Franchisor with I. Except in the case of a complete copy transfer to a corporation formed solely for the convenience of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor ownership, a transfer fee in the amount of twenty equal to twenty-five percent (2025%) of the then-current initial Franchise Fee. (Up fee then being charged to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound new franchisees shall have been paid by the transferee to the obligations Franchisor to cover the Franchisor's administrative, training and other expenses incurred in connection with the transfer.
J. Franchisee shall comply with Article XXV hereof, subsequent to the transfer or sale.
22.4 Franchisee acknowledges and agrees that each of the new Franchise Agreement and foregoing conditions which must be met by the transferee are necessary to guarantee the assure such transferee's full performance thereof by of the transferee, if required by Franchisorobligations hereunder.
G. If 22.5 In the event Franchisee wishes to transfer form a corporation after this Agreement or any interest therein is executed, solely for the convenience of ownership, the following requirements shall also apply to a corporation, limited liability company or other legal entity ("Entity") which Franchisee:
A. Franchisee's newly formed corporation shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly duly organized and its charter shall at all times provide that its activities are confined exclusively to the operation of operating the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement.
7. B. Copies of the transferee EntityFranchisee's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, and any amendments thereto, including the resolutions of the Board of Directors authorizing entry into this Agreement, shall be delivered promptly furnished to the Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoption.
8C. All stock certificates of such corporation bear the following legend, which shall be printed legibly and conspicuously on the face of each such stock certificate: "The transfer of this stock certificate is subject to the terms and conditions of a certain Franchise Agreement entered into with ZAP Power Systems dated __________________, 19___."
D. Franchisee shall maintain a current list of all owners of record and all beneficial owners of any class of voting stock of Franchisee and shall furnish the list to the Franchisor upon request. The term In the event that the Franchisee is an individual who is transferring this franchise to a corporation solely for the convenience of ownership, said Franchisee shall own at least the majority of equity and voting stock in such corporation.
E. All shareholders or general partners of Franchisee shall jointly and severally guarantee Franchisee's performance hereunder and shall bind themselves to the terms of this Agreement, by executing a Transfer of Franchise to a corporation form, if the Franchisee is an individual who is then forming the corporation solely for the convenience of ownership, provided, however, that the Requirements of this Section 22.5 E. shall not apply to a publicly-held corporation.
F. In no event shall the formation of the transferred franchise shall be corporation relieve the unexpired term of individual Franchisee from his or her personal liability under this Agreement.
922.6 Securities of the Franchisee may not be offered to the public without the prior written consent of the Franchisor. All registration materials required for such offering by federal or state law shall be submitted to the Franchisor for review prior to their being filed with any government agency and any materials to be used in any exempt offering shall be submitted to the Franchisor for review prior to their use. No public offering by Franchisee shall imply (by way of Proprietary Rights or otherwise) that the Franchisor is participating in an underwriting, issuance or public offering of Franchisee's or the Franchisor's securities, and the Franchisor's review of any offering shall be limited solely to the subject of the relationship between Franchisee and the Franchisor. Franchisee and the other participants in the registration must fully indemnify the Franchisor in connection with the registration. For each proposed public offering, Franchisee shall reimburse the Franchisor for its reasonable costs and expenses associated with reviewing the proposed offering, including, without limitation, legal and accounting fees. Franchisee shall give the Franchisor at least sixty (60) days prior written notice prior to the effective date of any public offering, or other transaction covered by this Section 22.6.
22.7 Any party holding any interest in Franchisee or in this franchise and who desires to accept any bona fide offer from a third party to purchase such interest shall first notify the Franchisor in writing of each such offer, and the Franchisor shall have the right and option, exercisable within fifteen (15) days after receipt of such written notification, to send written notice to the Franchisee that the Franchisor intends to purchase the Franchisee's interest on the same terms and conditions offered by the third party. Any material change in the terms of any offer prior to closing shall constitute a new offer subject to the same rights of first refusal by the Franchisor as in the case of an initial offer. Failure of the Franchisor to exercise the option afforded by this Section 22.7 shall not constitute a waiver of any other provision of this Agreement, including all of the requirements of this Article XXII, with respect to a proposed transfer and all requirements with respect thereto.
22.8 In the event the consideration, terms and/or conditions offered by a third party are such that the Franchisor may not reasonably be required to furnish the same consideration, terms, and/or conditions, then it may purchase interest in the Outlet proposed to be sold for the reasonable equivalent in cash. If the parties cannot agree, within a reasonable time, on the reasonable equivalent in cash of the consideration, terms and/or conditions offered by a third party, an independent appraiser shall be designated by the parties and his determinations shall be binding on both.
22.9 In the event that a proposed transfer is between any two individuals or entities holding any interest in Franchisee as of the date of this Agreement, or in the event that the proposed transferee is the spouse, son, daughter, or heir of any individual who seeks to transfer any interest in Franchisee, the Franchisor shall not have any right of first refusal as provided in this Section.
22.10 In the event of the death or incapacity of an individual Franchisee, or any principal owner owning fifty percent (50%) or more of the equity of Franchisee, the heirs, beneficiaries, devisee or legal representatives of said individual or principal owner shall, within one hundred eighty (180) days of such event:
A. Apply to Franchisor for the right to continue to operate the Franchise for the duration of the term of the Agreement and any renewals hereof, which right shall be granted upon the fulfillment of all of the conditions set forth in Article XXI of this Agreement (except that no transfer fee shall be required); or
B. Sell, assign, transfer, or convey Franchisee's interest in compliance with the provisions of Article XXI of this Agreement; provided however, in the event a proper and timely application for the right to continue to operate has been made and rejected, the one hundred eighty (180) days to sell, assign, transfer or convey shall be computed from the date of said rejection. For purposes of this section, Franchisor's silence on an application made pursuant to Section 21.10.A though the one hundred eighty days (180) days following the event of death or incapacity shall be deemed a rejection made on the last day of such period.
22.11 In the event of the death or incapacity of an individual Franchisee, or any principal owner described in paragraph 22.10 above, where the aforesaid provisions of Article XXII have not been fulfilled within the time provided, all rights licensed to Franchisee under this Agreement shall, at the option of Franchisor, terminate forth-with and automatically revert to Franchisor.
22.12 The Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business franchise granted herein shall not constitute a waiver of any claims Franchisor it may have against the transferor or the transfereetransferring party, nor shall it be deemed a waiver of the Franchisor's right to demand exact compliance with any of the terms of this AgreementAgreement by the transferee.
H. 22.13 Franchisee acknowledges and agrees that the restrictions on transfer imposed herein are reasonable and are necessary to protect the franchise, the System and the Proprietary Rights, as well as ZAP's excellent reputation and image, and are for the protection of Franchisor mayand its franchisees. Any assignment or transfer permitted by this Article XXII shall not be effective until Franchisor receives a completely executed copy of all transfer documents, and Franchisor issues its consent in writing thereto.
22.14 Franchisee shall not, without liability of any kind or nature whatsoever to Franchisee, make available for inspection by any intended transferee of Franchisee all or any part of Franchisor's records relating to this Agreement, the Franchised Business, or to the history of the relationship of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee shall not , without prior written consent of Franchisor, Franchisor place in, on or upon the location of the Franchised Business, Outlet or in any communication media, any form of advertising relating to the sale of the Franchised Business business franchised or the rights granted hereunder. Further, in the event Franchisor shall procure a purchaser for Franchisee (or any principal owner), in addition to all other fees payable hereunder in connection with the transfer, Franchisee or the assignee shall pay Franchisor a commission equal to ten percent (10%) of the total purchase price payable by the purchaser.
22.15 Notwithstanding anything to the contrary above or herein, it is contemplated that Franchisee, in connection with the initial financing of the establishment of Franchisee's Outlet, its business and operations, maybe required to provide a bank or financial institution with a security interest in substantially all of its assets, including a pledge of this Agreement and Franchisee's common stock or other equity. Franchisor will not have a right of first refusal in connection with Franchisee's giving of such security interest. Further, Franchisor's consent to the giving of such security interest and/or pledge will be granted so long as Franchisee is in compliance with this Agreement as well as its other agreements with Franchisor, if any, the security interest in the assets of the Outlet is given in order to facilitate the financing of the development of such Outlet or other Outlets of Franchisee and subject to the following: In connection with any pledge of this Agreement, any lease (or similar agreement) in respect of any premises for the Outlet and/or the stock or other equity of Franchisee, Franchisee's bank or financial institution must agree to the reasonable satisfaction of Franchisor that: (i) it will notify Franchisor reasonably promptly of any defaults by Franchisee of any of Franchisee's obligations in connection with any loan made to Franchisee; (ii) if it seeks to reassign or transfer the stock or other equity of Franchisee and/or Franchisee's interest in this Agreement or the business conducted hereunder to a third party, such third party must meet Franchisor's then current criteria for its franchisees to Franchisor's satisfaction (but Franchisor shall exercise reasonableness in making this determination) and the other conditions set forth herein in connection with obtaining Franchisor=s consent to an assignment or transfer sh
Appears in 1 contract
TRANSFERABILITY OF INTEREST. A. This Agreement Franchisee understands and all rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to acknowledges that the benefit of Franchisor's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall: (i) at the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly assume and agree to perform such obligations.
B. Franchisee shall not transfer, sell or assign fifteen percent (15%) or more of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee as set forth in this Agreement, and the franchise herein granted, Agreement are personal to Franchisee, and that Franchisor has agreed to enter into granted this contract with Franchisee franchise in reliance upon Franchisee's personal skill on the business skill, financial capacity, and financial abilitycharacter of Franchisee and its general partners, controlling shareholders or controlling individuals. Franchisee shall retain leasehold ownership of the Hotel except as may be otherwise approved by Franchisor in writing. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, remote successor to any part of Franchisee's ’s interest in this Agreement may franchise, or any individual, partnership, corporation, or other legal entity that directly or indirectly owns or controls any interest (other than interests of limited partners) in this franchise or in Franchisee, shall sell, assignassign (collaterally or otherwise), transfer, convey, give awaymortgage, pledge, mortgage grant a security interest or otherwise encumber (each, a “Transfer”) any direct or indirect interest in this Agreement or in the franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part of the operating control of the business of Franchisee, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor.
D. If Franchisee desires to sell or transfer all or any part of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor (including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement.
7. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, shall be promptly furnished to Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoption.
8. The term of the transferred franchise shall be the unexpired term of this Agreement.
9. Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business shall not constitute a waiver of Franchisee or any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of controlling (greater than 15%) interest in any kind or nature whatsoever to entity that controls Franchisee, make available for inspection by any intended transferee but excluding interests of Franchisee all or any part limited partners, if any), and no Transfer of Franchisor's records relating to this Agreement, the Franchised Business, or to the history a substantial portion of the relationship assets (including building and real estate) of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee Franchised Business shall not , occur without the prior written consent of Franchisor. Except as otherwise provided in this Section XV and Section XVI, place inany Transfer addressed in the immediately preceding sentence, on by operation of law. sale of stock or upon otherwise, not having the location prior written consent of Franchisor will be a material default under this Agreement giving Franchisor the right to terminate this Agreement pursuant to Paragraph XVII.B.4. and seek injunctive relief as well as monetary damages. Notwithstanding anything to the contrary in this Agreement, Franchisor shall have the right to withhold its consent to any Transfer of any interest in this Agreement, Franchisee or any entity that controls Franchisee if Franchisee is in default hereunder.
B. Except as prohibited under Paragraph XX.F., Franchisor shall not require approval of the Transfer of all or any part of the assets of the Franchised Business (excluding this franchise, this Agreement, and any stock, partnership or other interests in Franchisee) to banks or other lending institutions that are not a Competitor (as defined herein) or an Affiliate of a Competitor for purposes of any refinancing or as collateral securing a loan made directly to or for the benefit of the Franchised Business, or in any communication media, any form of advertising relating to the sale of the Franchised Business or the rights granted hereunder.
Appears in 1 contract
TRANSFERABILITY OF INTEREST. A. This Agreement Franchisee understands and all rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to acknowledges that the benefit of Franchisor's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall: (i) at the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly assume and agree to perform such obligations.
B. Franchisee shall not transfer, sell or assign fifteen percent (15%) or more of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee as set forth in this Agreement, and the franchise herein granted, Agreement are personal to Franchisee, and that Franchisor has agreed to enter into granted this contract with Franchisee franchise in reliance upon Franchisee's personal skill on the business skill, financial capacity, and financial abilitycharacter of Franchisee and its general partners, controlling shareholders or controlling individuals. Franchisee shall retain ownership of the Hotel except as may be otherwise approved by Franchisor in writing. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, remote successor to any part of Franchisee's ’s interest in this Agreement may franchise, or any individual, partnership, corporation, or other legal entity that directly or indirectly owns or controls any interest (other than interests of limited partners) in this franchise or in Franchisee, shall sell, assignassign (collaterally or otherwise), transfer, convey, give awaymortgage, pledge, mortgage grant a security interest or otherwise encumber (each, a “Transfer”) any direct or indirect interest in this Agreement or in the franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part of the operating control of the business of Franchisee, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor.
D. If Franchisee desires to sell or transfer all or any part of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor (including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement.
7. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, shall be promptly furnished to Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoption.
8. The term of the transferred franchise shall be the unexpired term of this Agreement.
9. Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business shall not constitute a waiver of Franchisee or any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of controlling (greater than 15%) interest in any kind or nature whatsoever to entity that controls Franchisee, make available for inspection by any intended transferee but excluding interests of Franchisee all or any part limited partners, if any), and no Transfer of Franchisor's records relating to this Agreement, the Franchised Business, or to the history a substantial portion of the relationship assets (including building and real estate) of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee Franchised Business shall not , occur without the prior written consent of Franchisor. Except as otherwise provided in this Section XV and Section XVI, place inany Transfer addressed in the immediately preceding sentence, on by operation of law, sale of stock or upon otherwise, not having the location prior written consent of Franchisor will be a material default under this Agreement giving Franchisor the right to terminate this Agreement pursuant to Paragraph XVII.B.4. and seek injunctive relief as well as monetary damages. Notwithstanding anything to the contrary in this Agreement, Franchisor shall have the right to withhold its consent to any Transfer of any interest in this Agreement, Franchisee or any entity that controls Franchisee if Franchisee is in default hereunder.
B. Except as prohibited under Paragraph XX.F., Franchisor shall not require approval of the Transfer of all or any part of the assets of the Franchised Business (excluding this franchise, this Agreement, and any stock, partnership or other interests in Franchisee) to banks or other lending institutions that are not a Competitor (as defined herein) or an affiliate of a Competitor for purposes of any refinancing or as collateral securing a loan made directly to or for the benefit of the Franchised Business.
C. Subject to Paragraph XV.D, Franchisor shall not unreasonably withhold its consent to a Transfer of any interest in this franchise, Franchisee, this Agreement, the Franchised Business, or in any communication media, any form a substantial portion of advertising relating to the sale assets (including building and real estate) of the Franchised Business Business; provided, however, if a Transfer, alone or together with other previous, simultaneous or proposed Transfers, would result in the Transfer of a controlling interest (as reasonably determined by Franchisor) in this franchise, Franchisee, the entity that controls Franchisee, this Agreement, or the rights granted hereunderFranchised Business, or substantially all of the assets (including building and real estate) of the Franchised Business, Franchisor may, in its sole discretion, require any or all of the following as a condition of its approval:
1. Franchisee shall satisfy all of Franchisee’s accrued monetary obligations to Franchisor, its subsidiaries and affiliates, and shall execute a general release in a form prescribed by Franchisor of any and all claims against Franchisor, its subsidiaries, affiliates, and their respective officers, directors, agents and employees;
2. Franchisee shall provide Franchisor with a true and complete copy of the purchase and sale agreement or similar document covering the transaction;
3. the proposed transferee shall submit to Franchisor an application, in the form prescribed by Franchisor, for a new franchise agreement to replace this Agreement for its unexpired term, and shall pay to Franchisor a transfer fee (which fee shall be refunded, less Ten Thousand Dollars ($10,000) to cover Franchisor’s cost of processing the application, in the event the application is disapproved). The amount of the transfer fee shall be equal to the amount of the application fee then being charged by Franchisor per room for System franchises for new development multiplied by the number of rooms in the Hotel or the minimum amount per hotel then being charged by Franchisor for System franchises for new development, whichever amount is greater. In the event that the Transfer involves multiple hotels, must be completed within a short timeframe, or involves other complications such that Franchisor determines in its Reasonable Business Judgment that it is necessary to obtain outside counsel to complete the Transfer, Franchisor shall have the right to require Franchisee to pay its outside counsel fees in connection with such Transfer. If, prior to the submission of an application, Franchisee desires Franchisor to review the Hotel to determine the renovations necessary to bring the Hotel into good repair and to conform the Hotel to Franchisor’s then current standards to transfer, Franchisor may charge its then current Property Improvement Plan (“PIP”) fee (currently, Five Thousand Dollars ($5,000)) to cover Franchisor’s costs associated with such PIP and consent review under this Paragraph XV.
Appears in 1 contract
TRANSFERABILITY OF INTEREST. A. a. This Agreement is personal to Dealer and, except as stated below, Company shall not allow or permit any transfer, assignment, subfranchise or conveyance of this Agreement or any interest hereunder. For purposes of this Section 15, the term "transfer" includes Dealer's voluntary, involuntary, direct or indirect transfer, assignment, sale, gift or other disposition of any interest in this Agreement, the Dealer entity, the Store governed by this Agreement or a substantial portion of the assets of the Store. Dealer shall not engage in a transfer unless Dealer obtains Company's written consent, which consent shall not be arbitrarily withheld, conditioned or delayed. Dealer acknowledges that Company's right to approve or disapprove a proposed transfer applies to the following: (1) if Dealer is a corporation, partnership, other business association, (i) to the addition or deletion of a shareholder, partner or member or the transfer of ownership interest among existing shareholders, partners or members, and (ii) to any proposed transfer of 25% or more of the interest (whether stock, partnership interest or membership interest) to a third party; and (2) if Dealer is an individual, to the transfer from such individual or individuals to a corporation or entity controlled by them. Notwithstanding the foregoing, transfers upon the existing shareholders, partners, members or other existing holders of ownership interest in the Dealer, transfers to the spouse or adult children of an existing shareholder, partner, member or other existing holder of ownership interests in Dealer, or transfers to trust, family limited partnerships or similar entities created primarily for estate planning purposes for the benefit of an existing shareholder, partner, member or other existing holder of an ownership interest in Dealer or the heirs of such party shall require notice to Company but shall not require the consent of the Company, provided, however, that if the effect of any of the transfers listed in this sentence serve either individually or cumulatively with all such transfers that preceded it, to effect a change in voting control of the Dealer or power to appoint officers or directors of Dealer or to direct day-to-day operations of the Dealer, such transfer shall require consent of the Company as described herein. Subject to the satisfaction of the conditions set forth below in this Section 15, this Agreement and all rights hereunder can may be assigned and or transferred by Franchisor the Dealer and, if soso assigned or transferred, shall be binding upon and inure to the benefit of Franchisorthe Dealer's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee .
b. No transfer of this Agreement shall be permitted unless each of the functions of Franchisor, the assignee shall: following conditions is satisfied:
(i) at the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly assume and agree to perform such obligations.
B. Franchisee shall not transfer, sell or assign fifteen percent (15%) or more of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee as set forth in this Agreement, and the franchise herein granted, are personal to Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, to any part of Franchisee's interest in this Agreement may sell, assign, transfer, convey, give away, pledge, mortgage or otherwise encumber any interest in this Agreement or in the franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part of the operating control of the business of Franchisee, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor.
D. If Franchisee desires to sell or transfer all or any part of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor Dealer and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement Company, in a form satisfactory to Franchisor that it the Company, wherein the transferee assumes all of the Dealer's obligations hereunder or, at the Company's option, the proposed transferee shall sign the then-current form of CarpetMAX -REGISTERED TRADEMARK- franchise agreement;
(ii) Dealer is held subject tocurrent on all of its obligations (financial or otherwise) to the Company; and all designated suppliers, distributors and vendors;
(iii) The transferee shall be of good moral character and reputation, shall have satisfactory business acumen, operational ability, and that further management skills, and shall have sufficient financial resources (as determined by the Company) to operate the Store(s) and the franchise license herein and have a good credit rating and competent business qualifications reasonably acceptable to the Company. Dealer shall provide the Company with such information as the Company may require to make such determination concerning any proposed transferee; and
(iv) Dealer executes a general release in a form prescribed by the Company, releasing the Company and any affiliates, their respective officers, directors, agents and employees from any and all claims which the Dealer may have against them.
c. Dealer must give the Company at least 45 days' written notice prior to any transfer of this Agreement by Dealer. The purpose of this provision is to enable the Company, among other reasons, to comply with applicable state or federal franchise disclosure laws. In addition, Dealer must, within 15 days of its receipt of an offer to assume Dealer's franchise or Dealer's offer to sell the franchise, give the Company written notice thereof. The purpose of this provision is to enable the Company to comply with any applicable state or federal franchise disclosure laws or rules.
d. This Agreement may be unilaterally assigned and transferred by Company and will inure to the benefit of Company's successors and assigns. Company will provide Dealer with written notice of any such assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by the assignee will be required to fully perform Company's obligations under this Agreement.
7. Copies e. Any transfer in violation of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, Section 15 shall be promptly furnished to Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoptiondeemed null and void and of no force or effect.
8. The term of the transferred franchise shall be the unexpired term of this Agreement.
9. Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business shall not constitute a waiver of any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of any kind or nature whatsoever to Franchisee, make available for inspection by any intended transferee of Franchisee all or any part of Franchisor's records relating to this Agreement, the Franchised Business, or to the history of the relationship of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee shall not , without prior written consent of Franchisor, place in, on or upon the location of the Franchised Business, or in any communication media, any form of advertising relating to the sale of the Franchised Business or the rights granted hereunder.
Appears in 1 contract
TRANSFERABILITY OF INTEREST. A. (a) This Agreement Lease and all rights hereunder can be assigned and transferred by Franchisor the Company and, if so, shall be binding upon and inure to the benefit of Franchisorthe Company's successors and assigns; provided.
(b) This Lease and all rights hereunder may be assigned and transferred by Lessee and, howeverif so, that with respect shall be binding upon and inure to any assignment resulting in the subsequent performance by benefit of Lessee's successors and assigns, subject to the assignee following conditions and requirements, and the Company's right of the functions of Franchisor, the assignee shall: first refusal as set forth herein:
(i) at Lessee may not sell, assign (including, but not limited to, assignments by operation of law) or transfer (collectively, "Assign") this Lease without the time Company's prior written consent. The Company has an absolute and unqualified right to withhold consent to such proposed Assignments. Any attempt by Lessee to Assign this Lease without the Company's prior written consent shall be void and of no force and effect. The sale, transfer, transfer by operation of law, or other disposition of Lessee's interest, or any part thereof, in the Lease, or any Person's ownership or other interest in Lessee, if Lessee is a corporation, partnership or other business entity, shall be an assignment requiring the Company's prior written consent. Lessee's written request for the Company's approval of any assignment must be received by the Company not less than ninety (90) days prior the effective date of such requested assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and .
(ii) expressly assume Notwithstanding the foregoing, Lessee may Assign this Lease without the Company's consent to an immediate family member of (i) Lessee, if Lessee is a natural person, or (ii) the Manager; PROVIDED that, in the Company's reasonable judgment, such family member is sufficiently qualified and agree to perform such obligationstrained ("Qualified Immediate Family Member").
B. Franchisee (iii) The Company shall have the preferential right to meet the bona fide offer of any proposed assignee; such right to be exercised by the Company within sixty (60) days following the date the Company receives a copy of Lessee's written request for the Company's approval of any assignment. Lessee shall include in such written request for the Company's approval of any assignment. Lessee shall include in such written request the name and address of the proposed assignee and the price, terms, and conditions contained in the bona fide offer. The Company's failure to exercise this preferential right shall not transfer, sell terminate this Agreement or assign fifteen percent (15%) the preferential right or more release Lessee from any of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisorits obligations under this Lease.
C. The rights and duties of Franchisee as set forth in this Agreement, and (c) If the franchise herein granted, are personal Lessee proposes to Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, to any part of Franchisee's interest in this Agreement may sell, assign, transfer, conveyassign or sublet this Lease, give away, pledge, mortgage or otherwise encumber any interest in this Agreement or in the franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part Company will perform a Five Star Appearance inspection of the operating control Leased Premises to determine necessary corrections to be made to bring the Leased Premises up to a Five Star Appearance inspection score equal to or greater than the Company's annually published minimum accept able score. The Company will also perform an engineering and maintenance inspection and, if deemed necessary by the Company, an environmental inspection, of the business Leased Premises to determine what actions are necessary to bring the Lessee into compliance with all of Franchiseethe provisions of Paragraph 9 and Exhibit C hereof. The results of the fore going inspections will be made in writing to Lessee and corrections made before sale, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisorsubletting is approved.
D. If Franchisee desires to sell or transfer all or (d) Notwithstanding any part of its interest in this Agreement and Franchise, or all or any part provision of the company which operates fore going subparagraphs (a) through (c), any attempted assignment of this Lease (including an assignment by operation of law) shall be void and of no force and effect unless the Franchised Business, Franchise Relationship is also transferred to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon assignee in accordance with the satisfaction pro visions of the following conditions:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement.
7. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, shall be promptly furnished to Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoption.
8. The term of the transferred franchise shall be the unexpired term of this Agreement.
9. Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business shall not constitute a waiver of any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of any kind or nature whatsoever to Franchisee, make available for inspection by any intended transferee of Franchisee all or any part of Franchisor's records relating to this Agreement, the Franchised Business, or to the history of the relationship of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee shall not , without prior written consent of Franchisor, place in, on or upon the location of the Franchised Business, or in any communication media, any form of advertising relating to the sale of the Franchised Business or the rights granted hereunder.
Appears in 1 contract
Sources: Lease Agreement (Ta Operating Corp)
TRANSFERABILITY OF INTEREST. A. 21.1 This Agreement and all rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to the benefit of Franchisor's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall: (i) at the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly assume and agree to perform such obligations.
B. 21.2 This Agreement and all rights hereunder may be assigned and transferred by Franchisee and, if so, shall not transferbe binding upon and inure to the benefit of Franchisee's successors and assigns, sell or assign fifteen percent (15%) or more subject to the following conditions and requirements, and Franchisor's right of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee first refusal as set forth in herein:
A. Franchisee may not sell, assign (including, but not limited to, assignments by operation of law) or transfer (collectively, "Assign") this Agreement, and the franchise herein granted, are personal to Franchisee, and Agreement without Franchisor's prior written consent. Franchisor has agreed an absolute and unqualified right to enter into withhold consent to such proposed Assignments. Any attempt by Franchisee to Assign this contract with Franchisee in reliance upon FranchiseeAgreement without Franchisor's personal skill prior written consent shall be void and financial abilityof no force and effect. AccordinglyThe sale, neither Franchisee nor any successor transfer, transfer by operation of Franchiseelaw, either immediate or remote, to any part other disposition of Franchisee's interest in this Agreement may sellinterest, assign, transfer, convey, give away, pledge, mortgage or otherwise encumber any interest in this Agreement or in the franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part of the operating control of the business of Franchisee, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor.
D. If Franchisee desires to sell or transfer all or any part of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general releasethereof, in a form satisfactory to Franchisor, of any and all claims against Franchisor including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement.
7. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, shall be promptly furnished to Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoption.
8. The term of the transferred franchise shall be the unexpired term of this Agreement.
9. Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business shall not constitute a waiver of any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of any kind or nature whatsoever to Franchisee, make available for inspection by any intended transferee of Franchisee all or any part of Franchisor's records relating to this Agreement, the Franchised Business, or any Person's ownership or other interest in Franchisee, if Franchisee is a corporation, partnership or other business entity, shall be an assignment requiring Franchisors prior written consent. Franchisee's written request for Franchisor's approval of any assignment must be received by Franchisor not less than ninety (90) days prior to the history effective date of such requested assignment.
B. Notwithstanding Subparagraph A above, Franchisee may Assign this Agreement without Franchisor's consent to an immediate family member of (i) Franchisee, if Franchisee is a natural person, or (ii) Franchisee's principal manager (insert name) ("Principal Manager"); provided ------------------------- that, in Franchisor's reasonable judgment, such family member is sufficiently qualified and trained ("Qualified Immediate Family Member").
C. Franchisor shall have the preferential right to meet the bona fide offer of any proposed assignee; such right to be exercised by Franchisor within sixty (60) days following the date Franchisor receives a copy of Franchisee's written request for Franchisor's approval of any assignment. Franchisee shall include in such written request the name and address of the relationship of proposed assignee and the parties heretoprice, terms, and conditions contained in the bona fide offer. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating failure to exercise this franchise by an intended transferee identified by Franchiseepreferential right shall not terminate this Agreement or the preferential right or release Franchisee from any of its obligations under this Agreement.
I. D. In the event of sale, transfer, or assignment of this Agreement by Franchisee shall not during the term of this Agreement, without prior written consent or at the expiration date of Franchisorthis Agreement, place in, on Franchisor will charge Franchisee a Transfer Fee of TEN THOUSAND Dollars ($10,000.00) ("Transfer Fee"). If the transfer is an assignment to a corporation in which Franchisee is the principal stockholder or upon the location officer responsible for the full-time personal operation and supervision of the Franchised Business, or in any communication mediaan assignment to a qualified immediate family member, any form of advertising relating to the sale of the Franchised Business or the rights granted hereunderfee will not be charged.
Appears in 1 contract
TRANSFERABILITY OF INTEREST. A. This Agreement Franchisee understands and all rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to acknowledges that the benefit of Franchisor's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall: (i) at the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly assume and agree to perform such obligations.
B. Franchisee shall not transfer, sell or assign fifteen percent (15%) or more of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee as set forth in this Agreement, and the franchise herein granted, Agreement are personal to Franchisee, and that Franchisor has agreed to enter into granted this contract with Franchisee franchise in reliance upon Franchisee's personal skill on the business skill, financial capacity, and financial abilitycharacter of Franchisee and its general partners, controlling shareholders or controlling individuals. Franchisee shall retain ownership of the Hotel except as may be otherwise approved by Franchisor in writing. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, remote successor to any part of Franchisee's ’s interest in this Agreement may franchise, or any individual, partnership, corporation, or other legal entity that directly or indirectly owns or controls any interest (other than interests of limited partners) in this franchise or in Franchisee, shall sell, assignassign (collaterally or otherwise), transfer, convey, give awaymortgage, pledge, mortgage grant a security interest or otherwise encumber (each, a “Transfer”) any direct or indirect interest in this Agreement or in the franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part of the operating control of the business of Franchisee, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor.
D. If Franchisee desires to sell or transfer all or any part of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor (including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement.
7. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, shall be promptly furnished to Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoption.
8. The term of the transferred franchise shall be the unexpired term of this Agreement.
9. Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business shall not constitute a waiver of Franchisee or any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of controlling (greater than 15%) interest in any kind or nature whatsoever to entity that controls Franchisee, make available for inspection by any intended transferee but excluding interests of Franchisee all or any part limited partners, if any), and no Transfer of Franchisor's records relating to this Agreement, the Franchised Business, or to the history a substantial portion of the relationship assets (including building and real estate) of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee Franchised Business shall not , occur without the prior written consent of Franchisor. In the event that Franchisor determines in its Reasonable Business Judgment that it is necessary to retain outside counsel to complete the Transfer, place inFranchisor shall have the right to require Franchisee to pay its outside counsel fees in connection with such Transfer. Except as otherwise provided in this Section XV and Section XVI, on any Transfer addressed in the immediately preceding sentence, by operation of law, sale of stock or upon otherwise, not having the location prior written consent of Franchisor will be a material default under this Agreement giving Franchisor the right to terminate this Agreement pursuant to Paragraph XVII.B.4. and seek injunctive relief as well as monetary damages. Notwithstanding anything to the contrary in this Agreement, Franchisor shall have the right to withhold its consent to any Transfer of any interest in this Agreement, Franchisee or any entity that controls Franchisee if Franchisee is in default hereunder.
B. Except as prohibited under Paragraph XX.F., Franchisor shall not require approval of the Transfer of all or any part of the assets of the Franchised Business (excluding this franchise, this Agreement, and any stock, partnership or other interests in Franchisee) to banks or other lending institutions that are not a Competitor (as defined herein) or an affiliate of a Competitor for purposes of any refinancing or as collateral securing a loan made directly to or for the benefit of the Franchised Business.
C. Subject to Paragraph XV.D, Franchisor shall not unreasonably withhold its consent to a Transfer of any interest in this franchise, Franchisee, this Agreement, the Franchised Business, or in any communication media, any form a substantial portion of advertising relating to the sale assets (including building and real estate) of the Franchised Business Business; provided, however, if a Transfer, alone or together with other previous, simultaneous or proposed Transfers, would result in the Transfer of a controlling interest (as reasonably determined by Franchisor) in this franchise, Franchisee, the entity that controls Franchisee, this Agreement, or the rights granted hereunder.Franchised Business, or substantially all of the assets (including building and real estate) of the Franchised Business, Franchisor may, in its sole discretion, require any or all of the following as a condition of its approval:
1. Franchisee shall satisfy all of Franchisee’s accrued monetary obligations to Franchisor, its subsidiaries and affiliates, and shall execute a general release in a form prescribed by Franchisor of any and all claims against Franchisor, its subsidiaries, affiliates, and their respective officers, directors, agents and employees;
2. Franchisee shall provide Franchisor with a true and complete copy of the purchase and sale agreement or similar document covering the transaction;
3. the proposed transferee shall submit to Franchisor an application, in the form prescribed by Franchisor, for a new franchise agreement to replace this Agreement for its unexpired term, and shall pay to Franchisor a transfer fee (which fee shall be refunded, less Ten Thousand Dollars ($10,000) to cover Franchisor’s cost of processing the application, in the event the application is disapproved). The amount of the transfer fee shall be equal to the amount of the application fee then being charged by Franchisor per room for System franchises for new development multiplied by the number of rooms in the Hotel or the minimum amount per hotel then being charged by Franchisor for System franchises for new development, whichever amount is greater. In the event that Franchisor determines in its Reasonable Business Judgment that it is necessary to retain outside counsel to complete the Transfer, Franchisor shall have the right to require Franchisee to pay its outside counsel fees in connection with such Transfer. If, prior to the submission of an application, Franchisee desires
Appears in 1 contract
TRANSFERABILITY OF INTEREST. A. This Agreement and all rights hereunder can may be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to the benefit of Franchisor's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall: (i) at the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly assume and agree to perform such obligations.
B. This Agreement and all rights hereunder may be assigned and transferred by Franchisee and, if so, shall not transferbe binding upon and inure to the benefit of Franchisee's successors and assigns, sell or assign fifteen percent (15%) or more subject to the following conditions and requirements, and Franchisor's right of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee first refusal as set forth in this Agreement, and the franchise herein granted, are personal to herein:
1. No Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability. Accordingly, neither Franchisee nor any successor partner of Franchisee, either immediate (if Franchisee is a partnership), or remoteshareholder of Franchisee (if Franchisee is a corporation), to any part without Franchisor's prior written consent, by operation of Franchisee's interest in this Agreement may law or otherwise shall sell, assign, transfer, convey, give away, pledgeor encumber to any person, mortgage firm, or otherwise encumber corporation, all or any part of its interest in this Agreement or its interest in the franchise granted herebyhereby or its interest in any proprietorship, partnership or corporation which owns any interest in the franchise, nor offer, permit, or suffer the same to be sold, assigned, transferred, conveyed, given away, or encumbered in any way to any person, firm, or corporation. Franchisee may not, without the prior written consent of Franchisor, fractionalize any of the rights of Franchisee granted pursuant to this Agreement. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part of rights herein not having the operating control of the business of Franchisee, aforesaid consent shall be null and void and shall constitute a material breach default hereunder.
2. Franchisor shall not unreasonably withhold its consent to any transfer referenced in Paragraph XVIII.B.1. of this AgreementAgreement when requested; provided, for which breach Franchisor may then terminate this Agreement without notice or opportunity however, that the following conditions and requirements shall first be met to cure, unless such assignment, transfer or encumbrance has the prior written consent full satisfaction of Franchisor.
D. a. If Franchisee is an individual or partnership and desires to sell or assign and transfer all or any part of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein rights to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
(1. The Entity ) Said transferee corporation shall be newly organized and its charter shall provide that its activities are confined exclusively to acting as a SUCCESSORIES Franchisee as franchised under this Agreement;
(2) Franchisee shall be and shall remain the operation owner of the Franchised Business.
2. Franchisee shall retain total ownership majority stock interest of the outstanding stock or other capital interest in transferee corporation;
(3) The individual Franchisee (or, if Franchisee is a partnership, one of the transferee Entity, partners) shall be and Franchisee shall act as remain the principal executive officer or officers and directors thereof.of the corporation;
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
(4. ) The Entity assignee transferee corporation shall enter into a written agreement with Franchisor expressly assuming assignment (in a form satisfactory to Franchisor), in which the transferee corporation assumes all of Franchisee's obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.hereunder;
(5. ) All owners of the stock or other ownership interest shareholders of the transferee Entity corporation shall enter into an agreement with a written agreement, in a form satisfactory to Franchisor, jointly and severally, severally guaranteeing the full payment and performance of the Entitytransferee corporation's obligations to Franchisor and the performance by the Entity of all the obligations of the under this Agreement.;
(6. ) Each stock certificate or other ownership interest certificate of the Entity transferee corporation shall have conspicuously endorsed upon the face thereof of it a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement;
(7) No new shares of common or preferred voting stock in the transferee corporation shall be issued to any person, partnership, trust, foundation, or corporation without obtaining Franchisor's prior written consent and then only upon disclosure of the terms and conditions contained herein being made to the prospective new holders of the stock;
(8) All accrued money obligations of Franchisee to Franchisee's suppliers, Franchisor, its subsidiaries or assignees, shall be satisfied prior to assignment or transfer.
7b. If the transfer, other than such transfer as is authorized under Paragraph XVIII.B.2.a. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, if consummated alone or together with other related previous, simultaneous, or proposed transfers, would have the effect of transferring control of the franchise licensed herein to someone other than an original signatory of this Agreement:
(1) The transferee(s) shall be promptly furnished of good moral character and reputation and shall have a good credit rating and competent business qualifications reasonably acceptable to Franchisor. Any amendment Franchisee shall provide Franchisor with such information as Franchisor may require to any make such documents shall also be furnished to Franchisor immediately upon adoptiondetermination concerning each such proposed transferee(s).
8. (2) The term of the transferred franchise transferee(s) or such other individual(s) as shall be the unexpired term actual manager of this Agreementthe franchise shall have successfully completed and passed the training course then in effect for franchisees, or otherwise demonstrated to Franchisor's satisfaction, sufficient ability to operate the unit being transferred.
9. (3) The transferee(s), including all shareholders, officers, directors and partners of the transferee(s), shall jointly and severally execute any or all of the following, at Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business sole discretion and as Franchisor shall not constitute a waiver of any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of any kind or nature whatsoever to Franchisee, make available for inspection by any intended transferee of Franchisee all or any part of Franchisor's records relating to this Agreement, the Franchised Business, or to the history of the relationship of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee shall not , without prior written consent of Franchisor, place in, on or upon the location of the Franchised Business, or in any communication media, any form of advertising relating to the sale of the Franchised Business or the rights granted hereunder.direct:
Appears in 1 contract
TRANSFERABILITY OF INTEREST. A. This Agreement and all rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to the benefit of Franchisor's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall: (i) at :
1. At the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly and
2. Expressly assume and agree to perform such obligations. Specifically, and without limitation to the foregoing, Franchisee expressly agrees that Franchisor may sell its assets, Marks or System outright to a third party; may make a public offering of securities; may engage in a private placement of some or all of its securities; may merge, acquire other corporations or entities, or be acquired by another corporation or other entity; may undertake a refinancing, recapitalization, leveraged buy out or other economic or financial restructuring; and, with regard to any or all of the above sales, assignments and dispositions, Franchisee expressly and specifically waives any claims, demands or damages arising from or related to the loss of said Marks (or any variation thereof) and/or the loss of association with or identification of PICK-UPS PLUS, INC. as Franchisor hereunder. Nothing contained in this Agreement shall require Franchisor to remain in the business in the event that Franchisor exercises its rights hereunder to assign its rights in this Agreement.
B. This Agreement and all rights hereunder may be assigned and transferred by Franchisee and, if so, shall not transferbe binding upon and inure to the benefit of Franchisee's successors and assigns, sell or assign fifteen percent (15%) or more subject to the following conditions and requirements, and Franchisor's right of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee first refusal as set forth in this Agreement, and the franchise herein granted, are personal to herein:
1. No Franchisee, and Franchisor has agreed to enter into this contract with partner of Franchisee in reliance upon Franchisee(if Franchisee is a partnership), or shareholder of Franchisee (if Franchisee is a corporation), without Franchisor's personal skill and financial ability. Accordinglyprior written consent, neither Franchisee nor any successor by operation of Franchisee, either immediate law or remote, to any part of Franchisee's interest in this Agreement may otherwise shall sell, assign, transfer, convey, give awayaway or encumber to any person, pledgefirm or corporation, mortgage all or otherwise encumber any part of its interest in this Agreement or its interest in the franchise granted herebyhereby or its interest in any proprietorship, partnership or corporation which owns any interest in the franchise, nor offer, permit or suffer the same to be sold, assigned, transferred, conveyed, given away or encumbered in any way to any person, firm or corporation. Franchisee may not, without the prior written consent of Franchisor, fractionalize any of the rights of Franchisee granted pursuant to this Agreement. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part of rights herein not having the operating control of the business of Franchisee, aforesaid consent shall be null and void and shall constitute a material breach default hereunder.
2. Franchisor shall not unreasonably withhold its consent to any transfer referenced in Paragraph XVIII.B.1. of this AgreementAgreement when requested; provided, for which breach Franchisor may then terminate this Agreement without notice or opportunity however, that the following conditions and requirements shall first be met to cure, unless such assignment, transfer or encumbrance has the prior written consent full satisfaction of Franchisor.
D. a. If Franchisee is an individual or partnership and desires to sell or assign and transfer all or any part of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein rights to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
(1. The Entity ) Said transferee corporation shall be newly organized and its charter shall provide that its activities are confined exclusively to acting as a PICK-UPS PLUS franchisee as licensed under this Agreement;
(2) Franchisee shall be and shall remain the operation owner of the Franchised Business.
2. Franchisee shall retain total ownership majority fifty-one percent (51%) stock interest of the outstanding stock or other capital interest in transferee corporation;
(3) The individual Franchisee (or, if Franchisee is a partnership, one [1] of the transferee Entity, partners) shall be and Franchisee shall act as remain the principal executive officer or officers and directors thereof.of the corporation;
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
(4. ) The Entity assignee transferee corporation shall enter into a written agreement with Franchisor expressly assuming assignment (in a form satisfactory to Franchisor), in which the transferee corporation assumes all of Franchisee's obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.hereunder;
(5. ) All owners of the stock or other ownership interest shareholders of the transferee Entity corporation shall enter into an agreement with a written agreement, in a form satisfactory to Franchisor, jointly and severally, severally guaranteeing the full payment and performance of the Entitytransferee corporation's obligations to Franchisor and the performance by the Entity of all the obligations of the under this Agreement.;
(6. ) Each stock certificate or other ownership interest certificate of the Entity transferee corporation shall have conspicuously endorsed upon the face thereof of it a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement;
(7) No new shares of common or preferred voting stock in the transferee corporation shall be issued to any person, partnership, trust, foundation, or corporation without obtaining Franchisor's prior written consent and then only upon disclosure of the terms and conditions contained herein being made to the prospective new holders of the stock; and
(8) All accrued money obligations of Franchisee to Franchisor, its subsidiaries or assignees, shall be satisfied prior to assignment or transfer.
7b. If the transfer, other than such transfer as is authorized under Paragraph XVIII.B.2.a. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, if consummated alone or together with other related previous, simultaneous, or proposed transfers, would have the effect of transferring control of the franchise licensed herein to someone other than an original signatory of this Agreement:
(1) The transferee(s) shall be promptly furnished of good moral character and reputation and shall have a good credit rating and competent business qualifications reasonably acceptable to Franchisor. Any amendment Franchisee shall provide Franchisor with such information as Franchisor may require to any make such documents shall also be furnished to Franchisor immediately upon adoptiondetermination concerning each such proposed transferee(s).
8. (2) The term of the transferred franchise transferee(s) or such other individual(s) as shall be the unexpired term actual manager of this Agreementthe franchise shall have successfully completed and passed the training course then in effect for franchisees, or otherwise demonstrated, to Franchisor's satisfaction, sufficient ability to operate the business being transferred.
9. (3) The transferee(s), including all shareholders, officers, directors and partners of the transferee(s), shall jointly and severally execute any or all of the following, at Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business sole discretion and as Franchisor shall not constitute a waiver of any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of any kind or nature whatsoever to Franchisee, make available for inspection by any intended transferee of Franchisee all or any part of Franchisor's records relating to this Agreement, the Franchised Business, or to the history of the relationship of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee shall not , without prior written consent of Franchisor, place in, on or upon the location of the Franchised Business, or in any communication media, any form of advertising relating to the sale of the Franchised Business or the rights granted hereunder.direct:
Appears in 1 contract
TRANSFERABILITY OF INTEREST. A. This Agreement Franchisee understands and all rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to acknowledges that the benefit of Franchisor's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall: (i) at the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly assume and agree to perform such obligations.
B. Franchisee shall not transfer, sell or assign fifteen percent (15%) or more of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee as set forth in this Agreement, and the franchise herein granted, Agreement are personal to Franchisee, and that Franchisor has agreed to enter into granted this contract with Franchisee franchise in reliance upon Franchisee's personal skill on the business skill, financial capacity, and financial abilitycharacter of Franchisee and its general partners, controlling shareholders or controlling individuals. Franchisee shall retain ownership of the Hotel except as may be otherwise approved by Franchisor in writing. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, remote successor to any part of Franchisee's ’s interest in this Agreement may franchise, or any individual, partnership, corporation, or other legal entity that directly or indirectly owns or controls any interest (other than interests of limited partners) in this franchise or in Franchisee, shall sell, assign, assign (collaterally or otherwise) transfer, convey, give awaymortgage, pledge, mortgage grant a security interest or otherwise encumber (each, a “Transfer”) any direct or indirect interest in this Agreement or in the franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part of the operating control of the business of Franchisee, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor.
D. If Franchisee desires to sell or transfer all or any part of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor (including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement.
7. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, shall be promptly furnished to Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoption.
8. The term of the transferred franchise shall be the unexpired term of this Agreement.
9. Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business shall not constitute a waiver of Franchisee or any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of controlling (greater than 15%) interest in any kind or nature whatsoever to entity that controls Franchisee, make available for inspection by any intended transferee but excluding interests of Franchisee all or any part limited partners, if any), and no Transfer of Franchisor's records relating to this Agreement, the Franchised Business, or to the history a substantial portion of the relationship assets (including building and real estate) of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee Franchised Business shall not , occur without the prior written consent of Franchisor. Except as otherwise provided in this Section XV and Section XVI, place inany Transfer addressed in the immediately preceding sentence, on by operation of law, sale of stock or upon otherwise, not having the location prior written consent of Franchisor will be a material default under this Agreement giving Franchisor the right to terminate this Agreement pursuant to Paragraph XVII.B.4. and seek injunctive relief as well as monetary damages. Notwithstanding anything to the contrary in this Agreement, Franchisor shall have the right to withhold its consent to any Transfer of any interest in this Agreement, Franchisee or any entity that controls Franchisee if Franchisee is in default hereunder.
B. Except as prohibited under Paragraph XX.F., Franchisor shall not require approval of the Transfer of all or any part of the assets of the Franchised Business (excluding this franchise, this Agreement, and any stock, partnership or other interests in Franchisee) to banks or other lending institutions that are not a Competitor (as defined herein) or an affiliate of a Competitor for purposes of any refinancing or as collateral securing a loan made directly to or for the benefit of the Franchised Business.
C. Subject to Paragraph XV.D, Franchisor shall not unreasonably withhold its consent to a Transfer of any interest in this franchise, Franchisee, this Agreement, the Franchised Business, or in any communication media, any form a substantial portion of advertising relating to the sale assets (including building and real estate) of the Franchised Business Business; provided, however, if a Transfer, alone or together with other previous, simultaneous or proposed Transfers, would result in the Transfer of a controlling interest (as reasonably determined by Franchisor) in this franchise, Franchisee, the entity that controls Franchisee, this Agreement, or the rights granted hereunderFranchised Business, or substantially all of the assets (including building and real estate) of the Franchised Business, Franchisor may, in its sole discretion, require any or all of the following as a condition of its approval:
1. Franchisee shall satisfy all of Franchisee’s accrued monetary obligations to Franchisor, its subsidiaries and affiliates, and shall execute a general release in a form prescribed by Franchisor of any and all claims against Franchisor, its subsidiaries and affiliates, and their respective officers, directors, agents and employees;
2. Franchisee shall provide Franchisor with a true and complete copy of the purchase and sale agreement or similar document covering the transaction;
3. the proposed transferee shall submit to Franchisor an application, in the form prescribed by Franchisor, for a new franchise agreement to replace this Agreement for its unexpired term, and shall pay to Franchisor a transfer fee (which fee shall be refunded, less Ten Thousand Dollars ($10,000) to cover Franchisor’s cost of processing the application, in the event the application is disapproved). The amount of the transfer fee shall be equal to the amount of the application fee then being charged by Franchisor per room for System franchises for new development multiplied by the number of rooms in the Hotel or the minimum amount per hotel then being charged by Franchisor for System franchises for new development, whichever amount is greater. In the event that the Transfer involves multiple hotels, must be completed within a short timeframe, or involves other complications such that Franchisor determines in its Reasonable Business Judgment that it is necessary to obtain outside counsel to complete the Transfer, Franchisor shall have the right to require Franchisee to pay its outside counsel fees in connection with such Transfer. If, prior to the submission of an application, Franchisee desires Franchisor to review the Hotel to determine the renovations necessary to bring the Hotel into good repair and to conform the Hotel to Franchisor’s then current standards to transfer, Franchisor may charge its then current Property Improvement Plan (“PIP”) fee (currently, Five Thousand Dollars ($5,000)) to cover Franchisor’s costs associated with such PIP and consent review under this Paragraph XV.
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TRANSFERABILITY OF INTEREST. A. This Agreement Franchisee understands and all rights hereunder can be assigned and transferred by Franchisor and, if so, shall be binding upon and inure to acknowledges that the benefit of Franchisor's successors and assigns; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall: (i) at the time of such assignment, be financially responsible and economically capable of performing the obligations of Franchisor hereunder; and (ii) expressly assume and agree to perform such obligations.
B. Franchisee shall not transfer, sell or assign fifteen percent (15%) or more of the assets used in the Franchised Business or any ownership interest licensed hereunder without the written consent of Franchisor.
C. The rights and duties of Franchisee as set forth in this Agreement, and the franchise herein granted, Agreement are personal to Franchisee, and that Franchisor has agreed to enter into granted this contract with Franchisee franchise in reliance upon Franchisee's personal skill on the business skill, financial capacity, and financial abilitycharacter of Franchisee and its general partners, controlling shareholders or controlling individuals. Franchisee shall retain ownership of the Hotel except as may be otherwise approved by Franchisor in writing. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, remote successor to any part of Franchisee's ’s interest in this Agreement may franchise, or any individual, partnership, corporation, or other legal entity that directly or indirectly owns or controls any interest (other than interests of limited partners) in this franchise or in Franchisee, shall sell, assignassign (collaterally or otherwise), transfer, convey, give awaymortgage, pledge, mortgage grant a security interest or otherwise encumber (each, a “Transfer”) any direct or indirect interest in this Agreement or in the franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights, or of all or any part of Franchisee's company under this Agreement, or of all or any part of the operating control of the business of Franchisee, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor.
D. If Franchisee desires to sell or transfer all or any part of its interest in this Agreement and Franchise, or all or any part of the company which operates the Franchised Business, to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:
1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
2. Unless prohibited by the law of the state where the Franchise is located, Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor (including its officers, directors, shareholders and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.
3. The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require to demonstrate ability to conduct the Franchised Business.
4. The transferee and, at Franchisor's option, all persons owning any interest in the transferee, shall execute the then-current Franchise Agreement for new franchisees which may be substantially different from this Agreement, including, without limitation, differences in Sales Commissions, territorial protection and other material provisions. The Franchise Agreement then executed shall be for the term specified in such Agreement.
5. The transferee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities, with respect to any representations regarding the franchise or the business conducted pursuant thereto or any other matter that may have been made to the transferee by the selling Franchisee.
6. Franchisee shall have provided Franchisor with a complete copy of all contracts and agreements and related documentation between Franchisee and the transferee relating to the sale or transfer of the franchise.
E. Franchisee shall have paid to Franchisor a transfer fee in the amount of twenty percent (20%) of the then-current initial Franchise Fee. (Up to $1,500 per town or city; multiple zip codes within one town or city still constitute a single franchise)
F. Franchisee agrees to continue to be bound to the obligations of the new Franchise Agreement and to guarantee the full performance thereof by the transferee, if required by Franchisor.
G. If Franchisee wishes to transfer this Agreement or any interest therein to a corporation, limited liability company or other legal entity ("Entity") which shall be entirely owned by Franchisee, which Entity is being formed for the financial planning, tax or other convenience of Franchisee, Franchisor's consent to such transfer shall be conditioned upon the following requirements:
1. The Entity shall be newly organized and its charter shall provide that its activities are confined exclusively to the operation of the Franchised Business.
2. Franchisee shall retain total ownership of the outstanding stock or other capital interest in the transferee Entity, and Franchisee shall act as the principal officer or officers and directors thereof.
3. All obligations of Franchisee to Franchisor or any affiliate shall be fully paid and satisfied prior to Franchisor's consent.
4. The Entity assignee shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of this Franchised Business. If the consent of any other contracting party to any such agreement be required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.
5. All owners of the stock or other ownership interest of the transferee Entity shall enter into an agreement with Franchisor, jointly and severally, guaranteeing the full payment of the Entity's obligations to Franchisor and the performance by the Entity of all the obligations of the Agreement.
6. Each stock certificate or other ownership interest certificate of the Entity shall have conspicuously endorsed upon the face thereof of a statement in a form satisfactory to Franchisor that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfers and assignments by this Agreement.
7. Copies of the transferee Entity's Articles of Incorporation, Bylaws, Operating Agreement, and other governing regulations or documents, including resolutions of the Board of Directors authorizing entry into this Agreement, shall be promptly furnished to Franchisor. Any amendment to any such documents shall also be furnished to Franchisor immediately upon adoption.
8. The term of the transferred franchise shall be the unexpired term of this Agreement.
9. Franchisor's consent to a transfer of any interest in this Agreement or of any ownership interest in the Franchised Business shall not constitute a waiver of Franchisee or any claims Franchisor may have against the transferor or the transferee, nor shall it be deemed a waiver of Franchisor's right to demand compliance with the terms of this Agreement.
H. Franchisor may, without liability of controlling (greater than 15%) interest in any kind or nature whatsoever to entity that controls Franchisee, make available for inspection by any intended transferee but excluding interests of Franchisee all or any part limited partners, if any), and no Transfer of Franchisor's records relating to this Agreement, the Franchised Business, or to the history a substantial portion of the relationship assets (including building and real estate) of the parties hereto. Franchisee hereby specifically consents to such disclosure by Franchisor and absolutely releases and agrees to hold Franchisor harmless from and against any claim, loss or injury resulting from an inspection of Franchisor's records relating to this franchise by an intended transferee identified by Franchisee.
I. Franchisee Franchised Business shall not , occur without the prior written consent of Franchisor. Except as otherwise provided in this Section XV and Section XVI, place inany Transfer addressed in the immediately preceding sentence, on by operation of law, sale of stock or upon otherwise, not having the location prior written consent of Franchisor will be a material default under this Agreement giving Franchisor the right to terminate this Agreement pursuant to Paragraph XVII.B.4. and seek injunctive relief as well as monetary damages. Notwithstanding anything to the contrary in this Agreement, Franchisor shall have the right to withhold its consent to any Transfer of any interest in this Agreement, Franchisee or any entity that controls Franchisee if Franchisee is in default hereunder.
B. Except as prohibited under Paragraph XX.F., Franchisor shall not require approval of the Transfer of all or any part of the assets of the Franchised Business (excluding this franchise, this Agreement, and any stock, partnership or other interests in Franchisee) to banks or other lending institutions that are not a Competitor (as defined herein) or an affiliate of a Competitor for purposes of any refinancing or as collateral securing a loan made directly to or for the benefit of the Franchised Business.
C. Subject to Paragraph XV.D, Franchisor shall not unreasonably withhold its consent to a Transfer of any interest in this franchise, Franchisee, this Agreement, the Franchised Business, or in any communication media, any form a substantial portion of advertising relating to the sale assets (including building and real estate) of the Franchised Business Business; provided, however, if a Transfer, alone or together with other previous, simultaneous or proposed Transfers, would result in the Transfer of a controlling interest (as reasonably determined by Franchisor) in this franchise, Franchisee, the entity that controls Franchisee, this Agreement, or the rights granted hereunder.Franchised Business, or substantially all of the assets (including building and real estate) of the Franchised Business, Franchisor may, in its sole discretion, require any or all of the following as a condition of its approval:
1. Franchisee shall satisfy all of Franchisee’s accrued monetary obligations to Franchisor, its subsidiaries and affiliates, and shall execute a general release in a form prescribed by Franchisor of any and all claims against Franchisor, its subsidiaries, affiliates, and their respective officers, directors, agents and employees;
2. Franchisee shall provide Franchisor with a true and complete copy of the purchase and sale agreement or similar document covering the transaction;
3. the proposed transferee shall submit to Franchisor an application, in the form prescribed by Franchisor, for a new franchise agreement to replace this Agreement for its unexpired term, and shall pay to Franchisor a transfer fee (which fee shall be refunded, less Ten Thousand Dollars ($10,000) to cover Franchisor’s cost of processing the application, in the event the application is disapproved). The amount of the transfer fee shall be equal to the amount of the application fee then being charged by Franchisor per room for System franchises for new development multiplied by the number of rooms in the Hotel or the minimum amount per hotel then being charged by Franchisor for System franchises for new development, whichever amount is greater. In the event that the Transfer involves multiple hotels, must be completed within a short timeframe, or involves other complications such that Franchisor determines in its Reasonable Business Judgment that it is necessary to obtain outside counsel to complete the Transfer, Franchisor shall have the right to require Franchisee to pay its outside counsel fees in connection with such Transfer. If, prior to the submission of an application, Franchisee desires Franchisor to review the Hotel to determine the renovations necessary to bring the Hotel into good repair and to conform the Hotel to Franchisor’s then current standards to transfer, Franchisor may charge
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