Does All County have a right of first refusal to acquire an All County franchisee's business?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause. This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise. Good cause shall include, but is not limited to:
- (i) The failure of the proposed transferee to meet the franchisor's then-current reasonable qualifications or standards.
- (ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor.
- (iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
- (iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
- (h) A provision that requires the franchisee to resell to the franchisor items that are not uniquely identified with the franchisor. This subdivision does not prohibit a provision that grants to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in subdivision (c).
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 31–34)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, All County has a right of first refusal to purchase a franchise. Specifically, this right allows All County to match the terms and conditions of a legitimate offer from a third party who wants to buy the franchise. This means that if a franchisee decides to sell their All County business and receives an offer from someone else, they must first offer All County the chance to buy the business on the same terms.
This right of first refusal does not allow All County to purchase the assets of a franchise on different terms than those offered by a third party, unless the franchisee has breached the franchise agreement. If a franchisee breaches the agreement and fails to fix the breach, All County has the right to acquire the franchise assets at market or appraised value.
For a prospective franchisee, this means that selling the business may require an extra step. Before finalizing a sale to a third party, All County must be given the opportunity to purchase the franchise on the same terms. This could potentially delay the sale or, if All County exercises its right, change the buyer. However, it also provides a potential exit strategy where the franchisee can sell back to the franchisor.