What happens if Apricot Lane does not exercise its right of first refusal for a proposed transfer?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
- If FRANCHISOR does not exercise this right of first refusal, the transfer may proceed subject to the prior written approval of FRANCHISOR and satisfaction of all applicable conditions under Section 20.C above, provided that if such transfer is not effected within one hundred twenty (120) days of the date thereof, FRANCHISOR shall again have the right of first refusal herein described. This right of first refusal is a continuing right of first refusal. FRANCHISOR's failure to exercise its right of first refusal shall not be deemed a waiver of future rights of first refusal. Any material changes in the terms of the offer noticed to FRANCHISOR shall operate to trigger the right of first refusal on the revised terms as if it were a new offer.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, if Apricot Lane chooses not to exercise its right of first refusal, the proposed transfer of the franchise can proceed. However, this is contingent upon Apricot Lane providing prior written approval and the franchisee satisfying all applicable conditions outlined in Section 20.C of the agreement.
It's important to note that the transfer must be completed within 120 days from the date Apricot Lane initially received notice of the proposed transfer. If the transfer is not finalized within this timeframe, Apricot Lane retains the right of first refusal, meaning the franchisee would need to re-notify Apricot Lane of the proposed transfer and Apricot Lane would have the option to purchase the franchise again.
Furthermore, Apricot Lane's decision not to exercise its right of first refusal in one instance does not waive its right to do so in the future. Any significant changes to the terms of the proposed transfer will trigger a new right of first refusal for Apricot Lane, as if it were a completely new offer. This ensures that Apricot Lane has the opportunity to reassess the transfer under any revised conditions.