How long does Beggars Pizza Franchisor have to exercise its right of first refusal?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
bstantially all of the assets of the Restaurant desires to accept any bona fide offer from a third party to purchase such interest, Franchisee must notify Franchisor as provided in Section 14.3, and must provide such information and documentation relating to the offer as Franchisor may require. Franchisor will have the right and option exercisable within thirty (30) days after receipt of such written notification to send written notice to the seller that Franchisor intends to purchase the seller's interest on the same terms and conditions offered by the third party. If Franchisor elects to purchase the seller's interest, the closing of such purchase will occur within thirty (30) days from the date of notice to the seller of the election to purchase by Franchisor. If Franchisor elects not to purchase the seller's interest, any material change thereafter in the terms of the offer from a third party will constitute a new offer subject to the same rights of first refusal by Franchisor as in the case of the third party's initial offer. Failure of Franchisor to exercise the option afforded by this Section 14.5 will not constitute a waiver of any other provision of the Agreement, including all of the requirements of this Section 14, with respect to a proposed transfer.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the franchisor has a specific timeframe to exercise its right of first refusal if a franchisee intends to sell their interest in the franchise. If a franchisee receives a legitimate offer from a third party and wishes to accept it, they must notify Beggars Pizza, providing all necessary information and documentation about the offer.
Upon receiving this notification, Beggars Pizza has thirty (30) days to decide whether to exercise its right to purchase the franchisee's interest on the same terms and conditions as the third party's offer. This means Beggars Pizza can step in and buy the franchise from the franchisee, preventing the sale to the third party. The closing of this purchase, should Beggars Pizza elect to proceed, must occur within thirty (30) days from the date Beggars Pizza notifies the seller of its intent to purchase.
If Beggars Pizza chooses not to exercise its right of first refusal, any significant changes to the terms of the third party's offer would constitute a new offer, which would again be subject to Beggars Pizza's right of first refusal. This ensures that Beggars Pizza has the opportunity to reassess the situation if the terms of the deal change. If the consideration offered by the third party involves terms that Beggars Pizza cannot reasonably match, Beggars Pizza may purchase the interest for the reasonable cash equivalent. If the parties cannot agree on the cash equivalent within thirty (30) days, an independent appraiser, designated and paid for by Beggars Pizza, will determine the value, and this determination will be binding.