What options does Amorino have after receiving notice of a proposed assignment of the Area Developer Agreement?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as expressly provided in Section 7.3 to the contrary, any assignment of this Agreement, or any interest herein, shall be subject to Company's right of first refusal with respect thereto. Company's said right of first refusal shall be exercised in the following manner:
- (a) Area Developer shall deliver to Company a written notice clearly and unambiguously setting forth all of the terms and conditions of the proposed assignment and all available information concerning the proposed assignee, including but not limited to, information concerning the employment history, financial condition, credit history, skill and qualifications of the proposed assignee and, in the case of a partnership or corporate assignee, of its partners and shareholders as applicable.
- (b) Within thirty (30) days after Company's receipt of such notice (or if Company shall request additional information, within thirty (30) days after receipt of such additional information), Company may either consent or withhold its consent to such assignment, in accordance with Section 7.3, or, at its option, accept the assignment to itself or to its nominee upon the terms and conditions specified in the notice. Company may substitute an equivalent sum of cash for any consideration other than cash specified in said notice.
- (c) If Company shall elect not to exercise its said right of first refusal and shall consent to such assignment, Area Developer shall,
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, if an Area Developer seeks to assign their agreement, Amorino has a right of first refusal. The Area Developer must provide written notice to Amorino that includes all terms and conditions of the proposed assignment, along with detailed information about the potential assignee's background, such as employment history, financial condition, credit history, skills, and qualifications. If the assignee is a partnership or corporation, this information must be provided for its partners and shareholders.
Within 30 days of receiving this notice (or within 30 days of receiving any additional information requested by Amorino), Amorino has three options. First, Amorino can consent to the assignment. Second, Amorino can withhold its consent. Third, Amorino can choose to accept the assignment itself or assign it to a nominee under the same terms and conditions specified in the Area Developer's notice. Amorino can also substitute an equivalent amount of cash for any non-cash consideration detailed in the notice.
If Amorino decides not to exercise its right of first refusal and consents to the assignment, the Area Developer is then free to assign the agreement to the proposed assignee, provided the terms remain the same. However, if the terms of the assignment materially change or if the assignment does not occur within 90 days, it is considered a new proposal, and Amorino once again has the right of first refusal. This process ensures that Amorino maintains control over who becomes an Area Developer and that the terms of the agreement are upheld.