Does the 7 Brew franchisor have a right of first refusal in potential transfer scenarios?
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.)
The title-holder agrees to sign and deliver to us at the Effective Date, for public recordation and other legitimate business purposes, a joinder signature page to this Agreement and any other document we specify so that public notice may be given of the rights set forth in this Section 16.G(2) and we may provide any other information required by the laws of the state in which the Store's underlying real estate is located. We have the right to record such documents at our expense at any time on or after the Effective Date.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the franchisor does have a right of first refusal if a franchisee attempts to transfer ownership. If 7 Brew chooses not to exercise this right, the franchisee can proceed with the sale to the proposed buyer, provided the sale is completed within sixty days and on the original terms.
If the sale to the proposed buyer is not completed within that 60-day window, or if there are any material changes to the terms of the sale, 7 Brew retains an additional right of first refusal for another 30 days. This ensures that 7 Brew has the opportunity to reassess the situation if the terms change or the sale is delayed.
7 Brew also has the right to assign its right of first refusal to a third party, including an affiliate. If this right is assigned, the assignee then assumes the franchisor's rights regarding the proposed transfer. To ensure public notice of these rights, the franchisee must sign a joinder signature page, allowing 7 Brew to record the document at its expense.