Is there a Baya Bar franchisor option to purchase the franchisee's business?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
| o. | Franchisor's option to purchase franchisee's business | Section 6.5.2 | Not Applicable | | n. | Franchisor's right of first refusal to acquire franchisee's business | Section 6.5 | death or permanent disability. You must promptly notify us of any written offer to purchase your Development Rights. We have 30 days to exercise our first right to buy it on the same terms and conditions, provided that (a) we may substitute cash for any other consideration (b).we may pay the entire purchase price at closing, (c) our credit is deemed as good as the proposed purchaser, (d) we have at least 60 days to close and (e) you shall give us all customary seller's representations and warranties.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 43–52)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, Baya Bar does not have the option to purchase the franchisee's business. However, Baya Bar does have the right of first refusal to acquire the franchisee's business.
Specifically, if a franchisee receives a written offer to purchase their Development Rights, they must promptly notify Baya Bar. Baya Bar then has 30 days to exercise its right to buy the business on the same terms and conditions as the offer.
However, Baya Bar can substitute cash for any other form of consideration, pay the entire purchase price at closing, and requires at least 60 days to close the transaction. Additionally, Baya Bar's credit must be deemed as good as the proposed purchaser, and the franchisee must provide all customary seller's representations and warranties.