If Baya Bar exercises its right of first refusal, how long does Baya Bar have to close the purchase?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
16.6.2 Franchisor has the right, exercisable by written notice to Franchisee within thirty (30) days after receipt of written notification and copies of all documentation required by Franchisor describing such offer, to buy the interest in this Agreement and the Franchised Business or the Principal's interest in Franchisee for the price and on the terms and conditions contained in the offer, subject to Section 16.6.3.
16.6.3 Franchisee further agrees, in the event Franchisor exercises its right of first refusal, notwithstanding anything to the contrary contained in the offer, that (i) Franchisor may substitute cash for any other form of consideration contained in the offer; (ii) at Franchisor 's option, Franchisor may pay the entire purchase price at closing; (iii) Franchisor 's credit will be deemed equal to the credit of any proposed transferee; (vi) Franchisor will have at least sixty (60) days to close the purchase; and (v) Franchisor will be entitled to receive from the Franchisee all customary representations and warranties given by a seller of the assets of a business or equity interest in an entity, as applicable.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, if a franchisee wishes to transfer their interest in the franchised business, Baya Bar has the right of first refusal. To exercise this right, Baya Bar must provide written notice to the franchisee within thirty (30) days of receiving notification of the offer to purchase the franchisee's interest, along with all required documentation.
If Baya Bar exercises its right of first refusal, the franchise agreement stipulates that Baya Bar will have at least sixty (60) days to close the purchase. This timeframe allows Baya Bar sufficient time to arrange for the financial and logistical aspects of acquiring the franchise.
Additionally, Baya Bar has the option to substitute cash for any other form of consideration proposed in the offer, pay the entire purchase price at closing, and will be entitled to receive all customary representations and warranties from the franchisee. These conditions provide Baya Bar with flexibility and protection during the purchase process.