How long does Benihana have to make a ROFR Decision after receiving a written offer from a Benihana franchisee?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
Party Disposition, notify BNC in writing of each such offer and shall provide to BNC such information and documentation relating to the offer as BNC may require. BNC shall have the right and option to acquire the interest offered to be sold in the Third Party Disposition on the same terms and conditions offered by the Proposed Transferee.
- 11.5.1 Any offer from a Proposed Transferee presented to BNC under this Section shall be in writing and shall include a signed copy of the agreement between Franchisee and the Proposed Transferee, a description of and information concerning the Proposed Transferee and its principals, including financial statements and relevant restaurant operating experience, if any.
- 11.5.2 BNC shall have thirty (30) days after BNC receives from Franchisee a copy of the written offer in which to accept the offer or waive its right of first refusal ("ROFR Decision"). BNC will communicate its ROFR Decision to Franchisee in writing. If BNC does not communicate its ROFR Decision before the expiration of such thirty (30) day period, BNC shall be deemed to have waived its right of first refusal.
- 11.5.3 If BNC exercises its right of first refusal and accepts the offer, closing on such purchase shall occur on a date specified by BNC in the notice of acceptance, which date shall be the date of closing specified in the agreement between Franchisee and the Proposed Transferee, or forty-five (45)
days from BNC's acceptance, whichever is later.
- 11.5.4 If BNC waives its right of first refusal and rejects the offer, BNC shall, within fifteen (15) days after the expiration of the thirty-day period set forth in subsection 11.5 (a) above, advise Franchisee whether BNC consents to the Third Party Disposition. If BNC consents to the Third Party Disposition, then Franchisee may conclude the sale to the Proposed Transferee on and subject to the terms and conditions of the agreement submitted to BNC.
- 11.5.5 Any change of any material term of the agreement, including but not limited to price, payment terms, interest being transferred by Franchisee, or the identity of the Proposed Transferee or any holder of any Ownership Interest in the Proposed Transferee, shall be deemed to be a new offer, subject to the right of first refusal contained herein.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana National Corp. (BNC) has 30 days to make a Right of First Refusal (ROFR) decision after receiving a written offer from a franchisee who intends to sell their interest to a third party. This 30-day period starts when BNC receives a copy of the written offer from the franchisee. The offer must include a signed agreement between the franchisee and the proposed buyer, along with details about the buyer, including their financial statements and restaurant operating experience, if any.
Benihana must communicate its decision in writing to the franchisee, either accepting the offer or waiving its right of first refusal. If Benihana does not communicate its decision within the 30-day timeframe, it is considered to have waived its right of first refusal.
If Benihana exercises its right of first refusal and accepts the offer, the closing date for the purchase will be determined by Benihana. This date will either be the closing date specified in the agreement between the franchisee and the proposed buyer or 45 days from Benihana's acceptance, whichever is later. If Benihana waives its right, it has 15 days after the initial 30-day period to advise the franchisee whether it consents to the sale to the third party. If consent is given, the franchisee can proceed with the sale under the terms of the submitted agreement. Any material change to the agreement, such as price or the buyer's identity, is considered a new offer, which restarts Benihana's right of first refusal.