factual

Does All County have a right of first refusal to purchase the assets of a franchise?

All_County Franchise · 2025 FDD

Answer from 2025 FDD Document

  • (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 22 — Contracts (FDD page 43)

What This Means (2025 FDD)

According to All County's 2025 Franchise Disclosure Document, All County retains a right of first refusal to purchase the assets of a franchise. Specifically, All County can purchase the assets on the same terms and conditions as a bona fide third party who is willing and able to purchase those assets. All County also has the right to acquire the assets of a franchise for the market or appraised value if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach as specified.

This right of first refusal means that if a franchisee decides to sell their All County franchise, they must first offer All County the opportunity to buy it on the same terms offered by a third-party buyer. This gives All County control over who enters the system and ensures that the brand maintains consistent standards.

For a prospective franchisee, this clause could limit their ability to sell to a preferred buyer if All County chooses to exercise its right of first refusal. However, it also provides a potential exit strategy, as All County may be a ready buyer if the franchisee decides to sell. It is important for franchisees to understand the conditions under which All County can exercise this right, particularly regarding breaches of the franchise agreement and the determination of market or appraised value.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.