How is 7 Brew's creditworthiness viewed compared to a proposed buyer when exercising its right-of-first-refusal?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
If we do not exercise our right-of-first-refusal, the title-holder may complete the sale to the proposed buyer on the original offer's terms. If the title-holder does not complete the sale to the proposed buyer within sixty (60) days after we notify the title-holder that we do not intend to exercise our right-of-first-refusal, or if there is a material change in the sale's terms (which the title-holder agrees to tell us promptly), we will have an additional right-of-first-refusal during the thirty (30) days following either expiration of the sixty (60) day period or our receipt of notice of the material change(s) in the sale's terms.
We have the unrestricted right to assign this right-of-first-refusal to a third party (including an affiliate), which then will have the rights described in this Section 16.G(2). (All references in this Section 16.G(2) to "we" or "us" include our assignee if we have exercised our right to assign this right-of-first-refusal to a third party.)
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the FDD does not specify how 7 Brew's creditworthiness is viewed compared to a proposed buyer when exercising its right-of-first-refusal. The document outlines the conditions under which 7 Brew can exercise its right of first refusal if a franchisee decides to sell their business. It details the process the franchisee must follow, including notifying 7 Brew of the proposed sale and its terms. 7 Brew then has a specific timeframe to decide whether to exercise its right to purchase the franchise on those same terms.
The FDD also mentions that 7 Brew has the unrestricted right to assign its right-of-first-refusal to a third party. If 7 Brew chooses not to exercise its right, the franchisee can proceed with the sale to the original proposed buyer, provided the sale is completed within a specified timeframe and on the same terms initially offered. Any material changes to the sale terms would trigger an additional right-of-first-refusal for 7 Brew.
To fully understand how 7 Brew evaluates creditworthiness in the context of right-of-first-refusal, a prospective franchisee should ask 7 Brew for clarification on the specific criteria and processes involved in assessing potential buyers, including any financial requirements or standards that a proposed buyer must meet. This information is crucial for franchisees planning to sell their business in the future.