Free Franchise Transfer Agreement Template

FRANCHISE TRANSFER AGREEMENT

This Agreement is made on [DATE] among [FRANCHISOR LEGAL NAME] ("Franchisor"), [SELLER NAME / ENTITY] ("Seller"), and [BUYER NAME / ENTITY] ("Buyer").

1. BACKGROUND. Seller operates a [BRAND] franchise at [ADDRESS] ("Franchised Business") under a franchise agreement dated [DATE] ("Existing Agreement"). Seller wishes to sell the Franchised Business to Buyer under an asset purchase agreement dated [DATE] ("Purchase Agreement"), and Franchisor is willing to consent on the terms below.

2. CONSENT. Franchisor consents to the transfer, subject to the conditions in Section 3 being met by [CLOSING DATE].

3. CONDITIONS. (a) Seller has paid all amounts owed to Franchisor and its affiliates through closing; (b) Buyer has completed Franchisor's application and training requirements [or will complete training within [NUMBER] days after closing]; (c) Buyer has received Franchisor's current Franchise Disclosure Document at least 14 days before signing, where required by law; (d) the landlord has consented to assignment of the premises lease or signed a new lease with Buyer; (e) any required remodel or upgrades listed in Schedule A are agreed with a completion date; and (f) the transfer fee is paid.

4. TRANSFER FEE. [Seller / Buyer] will pay Franchisor a transfer fee of $[AMOUNT] at closing, covering Franchisor's costs of review and training [and no other fee].

5. FRANCHISE AGREEMENT FOR BUYER. [Buyer will assume the Existing Agreement for its remaining term, ending [DATE], on its current terms. / Buyer will sign Franchisor's then-current form of franchise agreement for a term of [NUMBER] years, with royalty of [PERCENT]% and advertising contribution of [PERCENT]%, as disclosed in the current FDD.]

6. SELLER RELEASE. On closing, Seller is released from obligations under the Existing Agreement arising after closing, except its continuing confidentiality obligations and its post-term non-compete, which will be limited to [NUMBER] months within [RADIUS] of the Franchised Business [or waived]. [Any general release Seller gives to Franchisor excludes claims that cannot be waived under applicable franchise law.]

7. GUARANTEES. Any personal guarantee Seller's owners gave for the Existing Agreement is released for obligations arising after closing. Buyer's owners will sign Franchisor's standard guarantee [limited to [AMOUNT], if negotiated].

8. ASSETS, RECORDS AND ACCOUNTS. Seller will transfer to Buyer the equipment, inventory, phone numbers, local listings and customer records included in the Purchase Agreement, and Franchisor will transfer or re-create Buyer's access to its systems, email and ordering accounts by closing.

9. RIGHT OF FIRST REFUSAL. Franchisor confirms it has [waived its right of first refusal for this transfer / declined to exercise it].

10. EMPLOYEES. Seller will pay all wages and benefits owed through closing. Buyer may offer employment to Seller's employees.

11. NO WARRANTY BY FRANCHISOR. Franchisor makes no representation about the value or performance of the Franchised Business except as set out in its FDD.

12. GOVERNING LAW. This Agreement is governed by the laws of [STATE], subject to any state franchise relationship or registration law that applies.

GENERAL PROVISIONS
(a) Notices. Notices must be in writing and sent to the addresses or emails above (or as later updated by notice). Email notice is effective when sent, unless the sender receives a delivery failure message.
(b) Entire agreement. This agreement, with any schedules and exhibits, is the entire agreement between the parties on its subject and replaces all prior discussions and agreements on that subject.
(c) Amendments and waivers. Changes must be in writing and signed by both parties. A failure or delay in enforcing any term is not a waiver of it.
(d) Severability. If any provision is found unenforceable, it will be limited to the minimum extent necessary and the rest of this agreement will remain in effect.
(e) Assignment. Neither party may assign this agreement without the other party's written consent, except to a successor in a merger or sale of substantially all of its business, on notice.
(f) Relationship. Nothing in this agreement creates a partnership, joint venture or agency relationship unless expressly stated.
(g) Counterparts and electronic signatures. This agreement may be signed in counterparts and by electronic signature, each of which is an original and together form one agreement.
(h) Independent advice. Each party has had the opportunity to review this agreement with its own legal counsel and signs it voluntarily.

FRANCHISOR: __________________  Name/Title: ______________  Date: __________
SELLER: ______________________  Date: __________
BUYER: _______________________  Date: __________

SCHEDULE A: Required remodel or upgrades, if any

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This free template is provided by ClauseAudit for general informational purposes and is not legal advice. Have it reviewed before use. Replace all [BRACKETED] placeholders.