Does Bee Organized have a right of first refusal to purchase a franchise in Michigan?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
14.F. FRANCHISOR'S RIGHT OF FIRST REFUSAL
If Franchisee or an Owner desire to engage, in whole or in part, in a Transfer of Franchisee, this Agreement, Franchisee's Bee Organized Business, Franchisee's non-residential Administrative Office, and/or Franchisee's Administrative Office, then Franchisee or such Owner (as applicable) must obtain a bona fide, signed written offer from the fully disclosed purchaser (the "Offer") and submit an exact copy of the Offer to Franchisor. Franchisor shall have 30 days after receipt of the Offer to decide whether Franchisor will purchase the interest in Franchisee, Franchisee's Bee Organized Business, Franchisee's non-residential Administrative Office, and/or Franchisee's Administrative Office for the same price and upon the same terms contained in the Offer (however, Franchisor may substitute cash for any form of payment proposed in the Offer). If Franchisor notifies Franchisee that Franchisor intends to purchase the interest within said 30 day period, Franchisee or Owner (as applicable) must sell the interest to Franchisor. Franchisor will have at least an additional 60 days to prepare for closing. Franchisor shall be entitled to receive from Franchisee or Owner (as applicable) all customary representations and warranties given by Franchisee or Owner (as applicable) as the seller of the assets and/or the ownership interest or, at Franchisor's election, the representations and warranties contained in the offer. If Franchisor does not exercise its right of first refusal, Franchisee or Owner (as applicable) may complete the Transfer to the purchaser pursuant to and in accordance with the terms of the Offer, provided that separate and apart from this Article 14.F. right of first refusal, Franchisee complies with the terms of this Article 14. However, if the sale to the purchaser is not completed within 120 days after delivery of the Offer to Franchisor, or there is a material change in the terms of the sale, Franchisor will again have the right of first refusal specified in this Article 14.F. Franchisor's right of first refusal in this Article 14.F. shall not apply to any Transfer pursuant to Article 14.E. of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 54–218)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, the franchisor generally has a right of first refusal regarding the transfer of a franchise. Specifically, if a franchisee or owner wants to transfer their Bee Organized business, agreement, non-residential Administrative Office, or Administrative Office, they must first get a signed, written offer from a prospective purchaser and provide a copy of it to Bee Organized.
Bee Organized then has 30 days to decide if it wants to purchase the interest on the same terms as the offer, although Bee Organized can substitute cash for any proposed form of payment. If Bee Organized decides to purchase the interest, the franchisee or owner must sell it to them, and Bee Organized will have at least an additional 60 days to prepare for closing.
However, in Michigan, certain provisions that might be in the franchise documents are void and cannot be enforced against the franchisee. While the Michigan amendment addresses several franchisee rights, it does not explicitly mention or prohibit the franchisor's right of first refusal. Therefore, the general right of first refusal, as described in the FDD, would likely apply unless a court interprets the Michigan amendment as implicitly negating that right. A prospective franchisee in Michigan should seek legal counsel to confirm the enforceability of the right of first refusal in their specific circumstances.