Under what circumstances does 7 Brew have a right-of-first-refusal regarding the transfer of franchise rights?
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, 7 Brew has a right-of-first-refusal when a franchisee (referred to as the 'title-holder') intends to sell their franchise. This means that before a franchisee can sell to a third party, they must first offer 7 Brew the opportunity to purchase the franchise on the same terms as the proposed sale.
If 7 Brew chooses not to exercise its right-of-first-refusal, the franchisee can proceed with the sale to the original proposed buyer, provided the sale is completed within sixty days of 7 Brew's notification of non-interest. However, if the sale is not completed within this timeframe, or if there are any material changes to the terms of the sale, the franchisee must notify 7 Brew, which then gains an additional right-of-first-refusal for thirty days following either the expiration of the initial sixty-day period or the receipt of notice regarding the material changes.
7 Brew also retains 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 7 Brew's rights in this matter. To ensure public notice of these rights, the franchisee agrees to sign and deliver a joinder signature page to 7 Brew, which 7 Brew can then record at its expense.