What happens if B Bops does not exercise its right of first refusal for a franchise sale?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee does not exercise its right of first refusal, Franchisee or such partner, shareholder or member may complete the transfer to the proposed purchaser pursuant to and in accordance with the terms of such offer, subject to compliance with the provisions of Section 19(C) hereof, which shall include obtaining the prior written consent of Company.
If Company elects not to exercise the right of first refusal and the terms of the unaccepted offer are altered in any material nature, Company shall, in each instance, be notified in writing of the revised offer and shall again have thirty (30) days to purchase the Franchise or such partner's, shareholder's or member's interest in Franchisee on the revised terms.
Company (or any affiliate of Company designated by Company) shall have the right and option, exercisable by written notice to Franchisee or such partner, shareholder or member thereof within thirty (30) days of the date of receipt by Company of a copy of such offer, to purchase the Franchise or such partner's, shareholder's or member's ownership interest in Franchisee for the price and on the same terms and conditions contained in such offer.
In the event Company (or any affiliate thereof) exercises its right of first refusal, closing of the transaction shall occur within one hundred twenty (120) days from the acceptance of such offer, unless otherwise agreed by the parties.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, if a franchisee intends to sell their franchise, they must first obtain a written offer from a prospective buyer and submit it to B Bops. B Bops then has 30 days to decide whether to exercise its right of first refusal and purchase the franchise on the same terms as the offer. If B Bops exercises this right, the closing of the transaction must occur within 120 days, unless both parties agree otherwise.
If B Bops chooses not to exercise its right of first refusal, the franchisee is then permitted to proceed with the sale to the proposed purchaser. However, this is contingent upon complying with Section 19(C) of the franchise agreement, which includes obtaining B Bops's prior written consent for the transfer. This ensures that even if B Bops waives its right to buy the franchise itself, it still retains control over who becomes the new franchisee.
In the event that the terms of the offer change materially after B Bops declines to exercise its right of first refusal, the franchisee must notify B Bops in writing of the revised offer. B Bops will then have another 30 days to decide whether to purchase the franchise under the new terms. This provision protects B Bops from being circumvented by a franchisee who might alter the deal to make it less attractive to B Bops after the initial refusal, ensuring B Bops has the opportunity to reconsider based on the final terms of the sale.