FRANCHISE TRANSFER AGREEMENT

[// GUIDANCE: This agreement documents the transfer of a franchise from an existing franchisee (Transferor) to a new owner (Transferee). Ensure compliance with FTC disclosure rules and state franchise laws.]

PARTIES

THIS FRANCHISE TRANSFER AGREEMENT (this "Agreement") is made effective as of [EFFECTIVE_DATE] (the "Closing Date"), by and among:

FRANCHISOR:
[FRANCHISOR_LEGAL_NAME], a [STATE] [ENTITY_TYPE] ("Franchisor");

TRANSFEROR:
[TRANSFEROR_LEGAL_NAME], a [STATE] [ENTITY_TYPE] ("Transferor"); and

TRANSFEREE:
[TRANSFEREE_LEGAL_NAME], a [STATE] [ENTITY_TYPE] ("Transferee").

RECITALS

A. Franchisor and Transferor are parties to that certain Franchise Agreement dated [ORIGINAL_DATE] (the "Original Franchise Agreement") for the operation of a [FRANCHISE_TRADE_NAME] franchise (the "Franchised Business") located at [FRANCHISE_ADDRESS] (the "Location").

B. Transferor desires to transfer and assign all of its right, title, and interest in and to the Original Franchise Agreement and the Franchised Business to Transferee.

C. Transferee desires to acquire all of Transferor's right, title, and interest in and to the Original Franchise Agreement and the Franchised Business and to assume all obligations thereunder.

D. The Original Franchise Agreement requires Franchisor's consent for any transfer, and Franchisor has agreed to consent to this transfer subject to the terms of this Agreement.

E. Transferee acknowledges receipt of Franchisor's Franchise Disclosure Document at least fourteen (14) calendar days before execution of this Agreement, as required by the FTC Franchise Rule (16 CFR Part 436).

NOW, THEREFORE, in consideration of the mutual covenants herein, the parties agree as follows:

1. FRANCHISOR'S CONSENT TO TRANSFER

1.1 Consent Granted

Subject to the terms and conditions of this Agreement, Franchisor hereby consents to the transfer of the Original Franchise Agreement and the Franchised Business from Transferor to Transferee.

1.2 Conditions Precedent

Franchisor's consent is conditioned upon satisfaction of all of the following:

☐ (a) Transferor is not in default of the Original Franchise Agreement
☐ (b) All amounts owed by Transferor to Franchisor and its affiliates have been paid
☐ (c) Transferee meets Franchisor's then-current qualifications
☐ (d) Transfer fee has been paid
☐ (e) Transferee has completed initial training
☐ (f) Transferee executes required documents
☐ (g) Lease assignment/consent has been obtained
☐ (h) Transferor has executed release and non-compete
☐ (i) Insurance certificates have been provided
☐ (j) State regulatory requirements have been satisfied

2. TRANSFER OF FRANCHISE

2.1 Assignment by Transferor

Transferor hereby assigns, transfers, conveys, and delivers to Transferee all of Transferor's right, title, and interest in and to:

(a) The Original Franchise Agreement;
(b) The Franchised Business as a going concern;
(c) The lease or sublease for the Location;
(d) All furniture, fixtures, equipment, inventory, and supplies at the Location;
(e) All customer lists and business records;
(f) All telephone numbers, email addresses, and social media accounts associated with the Franchised Business;
(g) All licenses and permits (to the extent transferable); and
(h) All goodwill associated with the Franchised Business.

2.2 Assumption by Transferee

Transferee hereby accepts such assignment and assumes and agrees to perform all of Transferor's obligations under the Original Franchise Agreement arising from and after the Closing Date.

2.3 Pre-Closing Obligations

Transferor shall remain liable for all obligations under the Original Franchise Agreement accruing before the Closing Date.

3. FRANCHISE AGREEMENT

3.1 New Franchise Agreement Required

☐ Option A - New Agreement: Transferee shall execute Franchisor's then-current form of Franchise Agreement attached hereto as Exhibit A, which shall supersede and replace the Original Franchise Agreement effective as of the Closing Date.

☐ Option B - Assignment Only: The Original Franchise Agreement shall be assigned to Transferee without modification, except that references to "Franchisee" shall refer to Transferee.

[// GUIDANCE: If requiring new agreement with materially different terms, FDD disclosure to Transferee required unless exempt under 16 CFR 436.9(c).]

3.2 Term

☐ The remaining term under the Original Franchise Agreement is [YEARS/MONTHS].
☐ The new Franchise Agreement provides for a term of [YEARS] years.

4. TRANSFER FEE

4.1 Fee Amount

As a condition of this transfer, Transferee (or Transferor, as agreed between them) shall pay to Franchisor a non-refundable transfer fee of $[TRANSFER_FEE].

4.2 Payment

☐ Payment received
☐ Payment due at Closing

5. TRAINING

5.1 Required Training

Transferee (or, if Transferee is an entity, its designated Operating Principal) shall complete Franchisor's initial training program before or within [DAYS] days after the Closing Date.

5.2 Training Costs

☐ Training provided at no additional charge
☐ Transferee shall pay training fee of $[TRAINING_FEE]

Transferee is responsible for all travel, lodging, and living expenses during training.

6. PURCHASE PRICE AND ASSETS

6.1 Purchase Price

The purchase price for the Franchised Business, to be paid by Transferee to Transferor, is $[PURCHASE_PRICE] (the "Purchase Price").

[// GUIDANCE: Franchisor is not a party to the purchase transaction and makes no representation regarding the reasonableness of the Purchase Price.]

6.2 Assets Included

The assets transferred include:

6.3 Franchisor's Disclaimer

Franchisor makes no representation or warranty regarding:
(a) The value, condition, or fitness of any assets;
(b) The accuracy of any financial information provided by Transferor;
(c) The future profitability or success of the Franchised Business; or
(d) The reasonableness of the Purchase Price.

7. TRANSFEROR'S OBLIGATIONS

7.1 Release by Transferor

To the fullest extent permitted by applicable law, Transferor, for itself and its owners, officers, directors, employees, agents, successors, and assigns, hereby releases Franchisor and its affiliates from any and all claims arising out of or relating to:

(a) The Original Franchise Agreement;
(b) The offer or sale of the franchise;
(c) The operation of the Franchised Business;
(d) The transfer transaction; and
(e) Any act or omission of Franchisor.

[// GUIDANCE: Release requirements may be limited in certain states. Review applicable state law.]

7.2 Non-Competition Covenant

For a period of [POST_TERM_YEARS] years following the Closing Date, Transferor and its principals shall not, directly or indirectly:

(a) Own, operate, lease, franchise, manage, or have any interest in any business that is the same as or similar to the Franchised Business;

(b) Solicit any customers of the Franchised Business; or

(c) Recruit or employ any employees of the Franchised Business or any other [FRANCHISE_TRADE_NAME] business.

This restriction shall apply within:
☐ [MILES] miles of the Location
☐ [MILES] miles of any [FRANCHISE_TRADE_NAME] location
☐ The former Designated Territory

7.3 Confidentiality

Transferor shall maintain the confidentiality of all Confidential Information indefinitely and shall return or destroy all confidential materials in its possession.

7.4 Cooperation

Transferor shall:
(a) Cooperate in the transition of the Franchised Business;
(b) Introduce Transferee to customers, suppliers, and employees;
(c) Execute all documents necessary to effect the transfer; and
(d) Assist Transferee during an initial transition period of [DAYS] days.

8. TRANSFEREE'S OBLIGATIONS

8.1 Representations and Warranties

Transferee represents and warrants that:

(a) Transferee has full power and authority to execute this Agreement;

(b) Transferee has received Franchisor's Franchise Disclosure Document at least fourteen (14) calendar days before executing this Agreement;

(c) Transferee has conducted independent investigation of the Franchised Business;

(d) Transferee has not relied on any representations by Franchisor regarding the earnings, profitability, or success of the Franchised Business;

(e) Transferee has had the opportunity to consult with independent legal, accounting, and business advisors;

(f) Transferee meets Franchisor's financial and other qualification requirements;

(g) All information provided by Transferee to Franchisor is accurate and complete; and

(h) Transferee understands and accepts the terms of the Franchise Agreement.

8.2 Personal Guaranty

If Transferee is an entity, the following individual(s) shall execute a Personal Guaranty in the form attached as Exhibit B:

8.3 Insurance

Before the Closing Date, Transferee shall provide certificates of insurance evidencing the required coverages.

8.4 Licenses and Permits

Transferee shall obtain all necessary licenses and permits to operate the Franchised Business.

9. LEASE MATTERS

9.1 Lease Assignment

☐ Landlord's consent to assignment of lease obtained (attached as Exhibit C)
☐ New lease executed between Transferee and landlord (attached as Exhibit C)
☐ Sublease from Franchisor/affiliate executed (attached as Exhibit C)

9.2 Lease Term

The lease expires on [LEASE_EXPIRATION_DATE], which is [BEFORE/AFTER] the expiration of the Franchise Agreement term.

9.3 Transferor's Continuing Liability

☐ Transferor is released from lease obligations
☐ Transferor remains secondarily liable under the lease

10. EMPLOYEES

10.1 No Obligation to Hire

Transferee is not obligated to hire any of Transferor's employees.

10.2 Independent Employment Decision

Transferee's employment decisions are made independently; Franchisor is not the employer of, and has no liability for, Transferee's employees.

10.3 WARN Act Compliance

The parties shall cooperate to ensure compliance with the Worker Adjustment and Retraining Notification Act and similar state laws, if applicable.

11. UPGRADE REQUIREMENTS

11.1 Required Upgrades

As a condition of this transfer, Transferee shall complete the following upgrades to the Franchised Business:

☐ Signage replacement/update
☐ Equipment upgrades: ________________________________
☐ Interior remodel: ________________________________
☐ Technology upgrades: ________________________________
☐ Other: ________________________________

11.2 Completion Deadline

All upgrades shall be completed by [UPGRADE_DEADLINE].

11.3 Estimated Cost

Estimated upgrade cost: $[UPGRADE_COST]

12. CLOSING

12.1 Closing Date

The closing of this transfer shall occur on [CLOSING_DATE].

12.2 Franchisor's Deliverables

At closing, Franchisor shall deliver:
(a) Executed copy of this Agreement;
(b) Consent letter; and
(c) New or assigned Franchise Agreement (as applicable).

12.3 Transferor's Deliverables

At closing, Transferor shall deliver:
(a) Executed copy of this Agreement;
(b) Release and non-compete agreement;
(c) All Operations Manuals and confidential materials;
(d) Keys, codes, and access credentials;
(e) Customer lists and business records; and
(f) Such other documents as Franchisor may require.

12.4 Transferee's Deliverables

At closing, Transferee shall deliver:
(a) Executed copy of this Agreement;
(b) Executed Franchise Agreement;
(c) Executed Personal Guaranty;
(d) Transfer fee payment;
(e) Insurance certificates;
(f) Evidence of required licenses and permits; and
(g) Such other documents as Franchisor may require.

13. INDEMNIFICATION

13.1 Transferor's Indemnification

Transferor shall indemnify Franchisor and Transferee against all claims arising from Transferor's operation of the Franchised Business before the Closing Date.

13.2 Transferee's Indemnification

Transferee shall indemnify Franchisor and Transferor against all claims arising from Transferee's operation of the Franchised Business from and after the Closing Date.

14. MISCELLANEOUS

14.1 Governing Law

This Agreement shall be governed by the laws of the State of [GOVERNING_STATE].

14.2 Entire Agreement

This Agreement, together with the Franchise Agreement and all exhibits, constitutes the entire agreement among the parties regarding the transfer.

14.3 Severability

If any provision is held invalid, the remaining provisions shall remain in effect.

14.4 Counterparts

This Agreement may be executed in counterparts.

14.5 Notices

All notices shall be in writing and delivered to the addresses set forth above.

15. EXECUTION

IN WITNESS WHEREOF, the parties have executed this Franchise Transfer Agreement as of the Closing Date.

FRANCHISOR:

[FRANCHISOR_LEGAL_NAME]

TRANSFEROR:

[TRANSFEROR_LEGAL_NAME]

TRANSFEREE:

[TRANSFEREE_LEGAL_NAME]

EXHIBITS

Exhibit A - New Franchise Agreement (if applicable)
Exhibit B - Personal Guaranty
Exhibit C - Lease Assignment/Landlord Consent
Exhibit D - Transferor Release and Non-Compete Agreement
Exhibit E - Asset Schedule
Exhibit F - State-Specific Addendum (if applicable)

TRANSFER CHECKLIST

Pre-Transfer:
☐ Transfer request received from Transferor
☐ Transferor compliance review completed
☐ Transferor amounts owed paid
☐ Transferee application received and reviewed
☐ Transferee qualifications verified
☐ FDD provided to Transferee (at least 14 days before signing)
☐ Transferee interview/Discovery Day completed
☐ Background check completed
☐ Financial verification completed

Documentation:
☐ Transfer Agreement prepared
☐ New Franchise Agreement prepared (if applicable)
☐ Personal Guaranty prepared
☐ Release and Non-Compete prepared
☐ State addendum prepared (if applicable)

Third-Party Consents:
☐ Landlord consent obtained
☐ Lender consent obtained (if applicable)
☐ Supplier/vendor notifications

Closing:
☐ Transfer fee collected
☐ All agreements executed
☐ Keys and credentials transferred
☐ Inventory verified
☐ Insurance certificates received
☐ Licenses transferred/obtained

Post-Transfer:
☐ Training scheduled/completed
☐ System records updated
☐ Vendor accounts updated
☐ Marketing materials updated
☐ Welcome communication sent

NOTICE: This template is provided for informational purposes only and does not constitute legal advice. Franchise transfers involve complex legal, financial, and operational considerations. Consult qualified franchise counsel before completing any transfer transaction.