How long does 360 Painting have to exercise its right of first refusal after receiving the required documents?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor does not exercise this right of first refusal within thirty (30) days, the offer or proposal may be accepted by Franchisee or its owners, subject to the prior written approval by Franchisor, as provided in this Section of the proposed Transfer.
Should the sale fail to close within one hundred twenty (120) days after the offer is delivered to Franchisor, Franchisor shall again have the right of first refusal herein described.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, the franchisor has 30 days to exercise its right of first refusal. If a franchisee intends to transfer their franchise, they must first provide 360 Painting with an offer. After receiving this notice, 360 Painting has 30 days to decide whether to match the offer and purchase the franchise themselves.
If 360 Painting chooses not to exercise its right of first refusal within the 30-day period, the franchisee is then permitted to accept the offer from the third party, subject to prior written approval by 360 Painting. However, this approval is still required, meaning that even if 360 Painting declines to buy the franchise itself, it still has the power to veto the sale to another buyer.
It is important to note that if the sale to the third party does not close within 120 days after the initial offer was delivered to 360 Painting, the franchisor's right of first refusal is reinstated. This means that the franchisee would need to resubmit the offer to 360 Painting, giving them another 30-day period to decide whether to purchase the franchise. This clause protects 360 Painting from being locked into a sale that takes an unreasonably long time to finalize and ensures they have the opportunity to reassess the situation if circumstances change.