What form of payment can All County substitute when exercising its right of first refusal?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
20.9. Our Right of First Refusal. We have the right, exercisable by written notice delivered to you or your selling owners within thirty (30) days from the date of the delivery to us of both an exact copy of such bona fide offer and all other information we request, to purchase such interest for the price and on the terms and conditions contained in such bona fide offer, provided that:
20.9.1. we may substitute cash for any form of payment or non-cash consideration proposed in such offer;
Source: Item 23 — Receipts (FDD pages 43–157)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, when All County exercises its right of first refusal to purchase a franchise, it has the option to substitute cash for any other form of payment initially proposed in the offer. This means that even if the original offer to purchase the franchise includes non-cash assets or financing arrangements, All County can choose to pay the purchase price entirely in cash.
This provision provides All County with flexibility in acquiring franchises. By substituting cash, All County can avoid the complexities and potential risks associated with other forms of payment, such as assuming liabilities or dealing with the valuation of non-cash assets. It also allows All County to expedite the purchase process, as cash transactions are typically simpler and faster to execute than those involving other forms of consideration.
For a prospective All County franchisee, this clause means that if they decide to sell their franchise, All County has the right to match the offer with a cash payment, potentially streamlining the sale. However, franchisees should be aware that All County's decision to exercise its right of first refusal and substitute cash could impact the tax implications of the sale, and they should seek professional advice to understand these implications fully.
It is also important to note that the FDD specifies other conditions related to All County's right of first refusal, such as the requirement for the proposed purchase price to be denominated in a dollar amount and the exclusion of other property or rights from the offer. Franchisees should carefully review all these conditions to ensure they understand their rights and obligations when considering a sale.