Does Beauty Bungalows have a right of first refusal to purchase the assets of a franchise?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) allow Franchisor the option, exercisable by Franchisor by written notice to Franchisee within thirty (30) days after expiration or earlier termination of this Agreement, to purchase from Franchisee any or all of the furnishings, equipment, signs, fixtures, supplies, materials and other assets related to the operation of the Business, at fair market value.
Franchisor shall purchase assets only and shall assume no liabilities, unless otherwise agreed in writing by the parties.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, upon the expiration, non-renewal, or earlier termination of the Franchise Agreement, Beauty Bungalows has the option to purchase the assets of the franchise. Beauty Bungalows can exercise this option by providing written notice to the franchisee within thirty (30) days after the expiration or earlier termination of the agreement.
Beauty Bungalows will purchase the assets at fair market value, and the purchase will only include the assets of the business. Beauty Bungalows will not assume any liabilities unless otherwise agreed to in writing by both parties. The assets that Beauty Bungalows may purchase include furnishings, equipment, signs, fixtures, supplies, materials, and other assets related to the operation of the Beauty Bungalows business.
This clause provides Beauty Bungalows with a mechanism to maintain control over its brand and locations. For a franchisee, this means that upon exiting the system, they may be required to sell their business assets back to Beauty Bungalows at fair market value, ensuring a smooth transition and continued operation of the location under the Beauty Bungalows brand.