Does Bee Organized have a right of first refusal to acquire a franchisee's business?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
| j. | Assignment | 14.A. | No restriction on our right to assign. |
|---|---|---|---|
| of the contract by franchisor | |||
| k. | "Transfer" by franchisee definition | 14.B. | A transfer means and includes, whether voluntary or involuntary, conditional or unconditional, direct or indirect: (a) an assignment, sale, gift, transfer, pledge or sub-franchise; (b) the grant of a mortgage, charge, lien or security interest, including, without limitation, the grant of a collateral assignment; (c) a merger, consolidation, exchange of shares or other ownership interests, issuance of additional ownership interests or securities representing or potentially representing ownership interests, or redemption of ownership interests; and (d) a sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any holder of ownership interests or to control the operations or affairs of Franchisee. |
| l. | Franchisor's approval of transfer by franchisee | 14.B. | Transfers require our prior written consent, which may be granted or withheld in our discretion. |
| m. | Conditions for franchisor's approval of transfer | 14.C. | For approval of your transfer, you must provide us with 30 days prior written notice of the proposed transfer; you and your Owners must not have defaulted in your obligations under the Franchise Agreement and all other agreements with us; you and your Owners must be in compliance with your obligations under the Franchise Agreement and all other agreements with us; the transferee must agree to be bound by all of the terms and provisions of the Franchise Agreement; the transferee's owners and their spouses must personally guarantee all of the terms and provisions of the Franchise Agreement; you and your Owners and their spouses must sign a general release in favor of us; the transfer must provide for the assignment and/or ownership of the approved location for the Franchised Business, and the transferee's continued use and occupancy of such location throughout the term of the Franchise Agreement; the assets of the Franchised Business must be transferred to the transferee; the transferee and the transferee's owners and managers, at the transferee's expense, must complete our training programs; we waive our right of first refusal; we approve of the transfer and |
| n. | Franchisor's right of first refusal to acquire franchisee's business | 14.F. | We have the right to match any offer to purchase your Bee Organized Business or the Corporate Entity operating your Bee Organized Business. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 35–40)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, Bee Organized does have a right of first refusal if a franchisee intends to sell their business. Specifically, Bee Organized has the right to match any offer a franchisee receives to purchase their Bee Organized business or the corporate entity that operates the Bee Organized business.
This right of first refusal is a common clause in franchise agreements. It allows Bee Organized to maintain control over who enters the franchise system and ensures that any new franchisee meets their standards. If a franchisee receives an offer that they are willing to accept, they must first give Bee Organized the opportunity to match that offer.
For a prospective franchisee, this means that even if they find a buyer for their Bee Organized franchise, they cannot automatically sell to that buyer. Bee Organized has the option to step in and purchase the business themselves, on the same terms. This could potentially delay or complicate the sale of the franchise, as the franchisee must wait for Bee Organized to make a decision. However, it also provides a degree of security, as the franchisee knows that Bee Organized is potentially a ready buyer if they decide to sell.