Is Amorino's right of first refusal subject to any exceptions?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
- G. Right of First Refusal. Any assignment or transfer of this Agreement, or any interest herein, except for a transfer to a Business Entity by you as an individual in the manner described in Section 15.C, shall be subject to Franchisor's right of first refusal with respect thereto. Franchisor's said right of first refusal shall be exercised in the following manner:
- (a) Franchisee shall deliver to Franchisor 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 Franchisor's receipt of such notice (or if Franchisor shall request additional information, within thirty (30) days after receipt of such additional information), Franchisor may either consent or withhold its consent to such assignment, or, at its option, accept the assignment to itself or to its nominee upon the terms and conditions specified in the notice. Franchisor may substitute an equivalent sum of cash for any consideration other than cash specified in said notice.
- (c) If Franchisor shall elect not to exercise its said right of first refusal and shall consent to such assignment, Franchisee shall, subject to the provisions of this Agreement, be free to assign this Agreement to such proposed assignee on the terms and conditions specified in said notice. If, however, Franchisor does not elect to exercise its right of first refusal and said terms shall be materially changed, or if more than 90 days shall pass without such assignment occurring, such changed terms or lapse of time shall be deemed a new proposal and Franchisor shall again have such right of first refusal with respect thereto.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to the 2025 Amorino FDD, any assignment or transfer of the franchise agreement or any interest in it is subject to Amorino's right of first refusal, except for a transfer to a Business Entity by the franchisee as an individual in the manner described in Section 15.C of the agreement. This means that if a franchisee wants to sell their franchise to someone else, Amorino has the first opportunity to buy it themselves or assign it to someone else.
To exercise this right, the franchisee must provide Amorino with a written notice detailing all terms and conditions of the proposed assignment, along with information about the potential buyer's background, financial condition, and qualifications. Amorino then has 30 days to either consent to the assignment, withhold consent, or accept the assignment themselves or through a nominee, potentially substituting cash for any non-cash consideration.
If Amorino chooses not to exercise its right of first refusal and consents to the assignment, the franchisee is free to proceed with the sale to the proposed assignee under the specified terms. However, if the terms change materially or the assignment does not occur within 90 days, it is considered a new proposal, and Amorino's right of first refusal is reinstated. This process ensures that Amorino maintains control over who becomes a franchisee and under what terms, safeguarding the brand's standards and reputation.
This right of first refusal is a common practice in franchising, allowing franchisors to control who enters their system. For a prospective Amorino franchisee, it means that selling the franchise may not be as simple as finding a buyer; Amorino has the right to step in and take over the franchise themselves or approve the buyer. Franchisees should carefully consider these conditions before deciding to sell their franchise.