If a Batteries Plus Bulbs franchisee desires to sell 50% or more of the ownership in the franchisee, what must they do?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
- F. Franchisor's Right Of First Refusal. If Franchisee or its Principal Owners at any time desire to sell or assign for consideration the Franchise, the Store, an ownership interest representing (in the aggregate) fifty percent (50%) or more of the ownership in Franchisee or all or substantially all of Franchisee's assets, Franchisee or its Principal Owners must obtain a bona fide, executed written offer from a qualified and fully disclosed purchaser and must deliver a copy of the offer to Franchisor. Franchisor has the right, exercisable by written notice delivered to Franchisee or its Principal Owners within thirty (30) days following receipt of the proposed offer, to purchase the interest in the Store or ownership interest in Franchisee for the price and on terms contained in the offer. Franchisor may substitute cash for any noncash form of payment proposed in the offer and will have a minimum of sixty (60) days to prepare for closing. If Franchisor does not exercise its right of first refusal, Franchisee or its Principal Owners may complete the sale to the proposed purchaser under the terms of the offer, provided Franchisee and the Principal Owners otherwise comply with this Section 15. If the sale to the proposed purchaser is not completed within one hundred twenty (120) days after delivery of the offer to Franchisor, or if there is a material change in the terms of the sale, Franchisor again has the right of first refusal.
Source: Item 22 — Contracts (FDD page 80)
What This Means (2025 FDD)
According to Batteries Plus Bulbs's 2025 Franchise Disclosure Document, if a franchisee or its principal owners want to sell or assign, for consideration, an ownership interest representing 50% or more of the ownership in the franchise, store, or assets, they must first obtain a bona fide, executed written offer from a qualified and fully disclosed purchaser. The franchisee must then deliver a copy of this offer to Batteries Plus Bulbs.
Batteries Plus Bulbs has the right of first refusal, meaning they can choose to purchase the interest in the store or ownership interest in the franchisee for the price and terms outlined in the offer. Batteries Plus Bulbs must exercise this right within 30 days of receiving the offer by providing written notice. They have the option to substitute cash for any non-cash payment proposed in the offer and will have a minimum of 60 days to prepare for closing.
If Batteries Plus Bulbs decides not to exercise its right of first refusal, the franchisee or its principal owners can proceed with the sale to the proposed purchaser, provided they comply with all other relevant conditions. However, the sale must be completed within 120 days after the offer was initially delivered to Batteries Plus Bulbs. If the sale is not completed within this timeframe, or if there are material changes to the terms of the sale, Batteries Plus Bulbs once again has the right of first refusal. This process ensures that Batteries Plus Bulbs maintains control over who becomes a franchisee and protects the integrity of the brand.