Franchise Transfer Agreement

FRANCHISE TRANSFER AGREEMENT

This Franchise Transfer Agreement (the Agreement) is made and entered into as of by and between Transferor Name: , a business organized under the laws of , with principal address at (Transferor), and Transferee Name: , a business organized under the laws of , with principal address at (Transferee).

RECITALS

WHEREAS, Transferor is the holder of the franchise rights and related assets pertaining to the business operating under the name located at (the Franchise); and

WHEREAS, Transferor desires to transfer and assign to Transferee, and Transferee desires to accept from Transferor, all of Transferor's right, title, and interest in and to the Franchise and certain related assets and obligations in accordance with the terms and conditions set forth in this Agreement; and

WHEREAS, the franchise agreement, trademark licenses, operations manuals and other contractual rights relating to the Franchise may require the prior written consent of the franchisor (Franchisor) to effectuate such transfer.

NOW, THEREFORE

In consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below:

a) "Assumed Obligations" means those liabilities expressly assumed by Transferee under Section 4.

b) "Closing" means the consummation of the transfer described in Section 2 upon satisfaction or waiver of the Conditions Precedent set forth in Section 6.

2. TRANSFER AND ASSIGNMENT

2.1 Transfer. Subject to the terms and conditions of this Agreement and contingent upon Franchisor's compliance with Section 2.4, Transferor shall assign, transfer and convey to Transferee, and Transferee shall accept, all of Transferor's right, title and interest in and to the Franchise, including without limitation the franchise rights, goodwill, customer lists, inventory (if applicable), fixtures and equipment listed on Schedule A (collectively, the Transferred Assets).

2.2 Excluded Assets. Transferor shall retain those assets expressly identified on Schedule B and shall not be deemed to have transferred any of Transferor's cash, tax refunds, or assets specifically reserved to Transferor.

2.3 Assumption of Obligations. On the Closing Date, and subject to the terms hereof, Transferee shall assume only those obligations set forth on Schedule C (Assumed Obligations). Transferee's assumption shall not be deemed to include any of Transferor's obligations accruing prior to the Closing Date except as expressly set forth on Schedule C.

2.4 Franchisor Consent. Transferor shall use commercially reasonable efforts to obtain the prior written consent of the franchisor. If franchisor consent is required and is not obtained as a condition to Closing, either party may terminate this Agreement in accordance with Section 6.2.

3. CONSIDERATION

3.1 Purchase Price. As consideration for the transfers and assignments set forth in Section 2, Transferee shall pay to Transferor a total purchase price of (Purchase Price), subject to adjustments as set forth in this Agreement.

4. CLOSING; CONDITIONS PRECEDENT

4.1 Closing. The Closing shall occur on the date mutually agreed by the parties following satisfaction or waiver of the Conditions Precedent (the Closing Date) at a location agreed by the parties or by electronic exchange of documents.

4.2 Conditions Precedent. The obligations of each party to consummate the Closing are subject to the following conditions precedent, each of which may be waived in writing by the party for whose benefit the condition exists:

- Franchisor's written consent, if required by the franchise agreement;
- No material breach of any representation, warranty or covenant by the other party; and
- Delivery of all documents required by this Agreement, including duly executed instruments of assignment and assumption.

5. REPRESENTATIONS AND WARRANTIES

5.1 Transferor Representations. Transferor represents and warrants to Transferee as of the date hereof and as of the Closing Date: (a) Transferor is the lawful owner of the Transferred Assets and has authority to transfer the same free and clear of all liens and encumbrances except as disclosed in Schedule D; (b) the Franchise is in material compliance with the franchise agreement and applicable franchise standards except as disclosed in writing to Transferee; and (c) there is no pending or, to Transferor's knowledge, threatened litigation, claim or administrative proceeding that would reasonably be expected to materially impair Transferor's ability to transfer the Franchise.

5.2 Transferee Representations. Transferee represents and warrants to Transferor that Transferee has the full corporate power, authority and financial capacity to perform its obligations hereunder and, upon Closing, will be duly able to operate the Franchise in accordance with the franchise agreement and applicable law.

6. COVENANTS

6.1 Operations Prior to Closing. Between the date of this Agreement and the Closing Date, Transferor shall operate the Franchise in the ordinary course of business consistent with past practice and shall not undertake any action that would reasonably be expected to have a material adverse effect on the Franchise or the value of the Transferred Assets.

6.2 Employee Matters. Any employees of Transferor who are not offered employment by Transferee shall remain employees of Transferor and Transferor shall be responsible for all wages, benefits and obligations arising prior to the Closing. If Transferee elects to offer employment to any employee, Transferee shall assume responsibility for such employee's compensation only from and after the effective date of hire.

6.3 Non-Competition. For a period of years following the Closing Date, Transferor shall not directly compete with the Franchise within a radius of miles of the Franchise location, except as otherwise agreed in writing.

7. INDEMNIFICATION

7.1 Transferor Indemnity. Transferor shall indemnify, defend and hold harmless Transferee from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys' fees) arising out of any breach of Transferor's representations, warranties or covenants contained in this Agreement or out of any obligations or liabilities of Transferor relating to the Franchise arising prior to the Closing Date.

7.2 Transferee Indemnity. Transferee shall indemnify, defend and hold harmless Transferor from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys' fees) arising out of Transferee's operation of the Franchise after the Closing Date or any breach of Transferee's representations, warranties or covenants contained in this Agreement.

8. NOTICES

All notices, requests, demands and other communications required or permitted hereunder shall be in writing and delivered to the parties at the addresses set forth below or to such other address as a party may designate by written notice in accordance with this Section. Notices shall be deemed given when delivered personally, by nationally recognized overnight courier, or three (3) business days after deposit in the U.S. mail, postage prepaid, certified or registered.

9. GOVERNING LAW; DISPUTE RESOLUTION

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to its conflict of laws principles. Any dispute arising out of or relating to this Agreement shall be resolved by binding arbitration in the county of the Franchise location unless the parties mutually agree otherwise.

10. ENTIRE AGREEMENT; SEVERABILITY

This Agreement, together with the Schedules attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, agreements and understandings between the parties. If any provision of this Agreement is held to be invalid or unenforceable under applicable law, such provision shall be modified to the extent necessary to make it enforceable, or if modification is not possible, severed, and the remaining provisions shall remain in full force and effect.

11. AMENDMENTS; WAIVER; COUNTERPARTS; FURTHER ASSURANCES

This Agreement may be amended or modified only by a written instrument executed by both parties. No failure or delay by either party in exercising any right under this Agreement shall operate as a waiver of such right. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Each party agrees to execute and deliver such further documents and instruments and take such further actions as may be reasonably necessary to carry out the transactions contemplated by this Agreement.

12. EXPENSES

Except as otherwise provided in this Agreement, each party shall bear its own fees and expenses incurred in connection with the negotiation, preparation and execution of this Agreement and the consummation of the transactions contemplated hereby.

13. FRANCHISOR

13.1 Franchisor Identification. Franchisor Name:

13.2 Franchisor Consent. The parties acknowledge that franchisor's written consent may be required. If required, the parties shall cooperate in good faith to obtain such consent and shall provide any documentation reasonably requested by Franchisor. Franchisor's consent, if obtained, shall be attached as an addendum to this Agreement and incorporated herein by reference.

14. MISCELLANEOUS

14.1 Survival. The representations, warranties and covenants of the parties set forth in this Agreement shall survive the Closing for a period of years, except as otherwise provided herein.

14.2 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns; provided that Transferee may not assign its rights or delegate its obligations under this Agreement without the prior written consent of Transferor and Franchisor to the extent required by the franchise agreement.

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