Does Benjamin Franklin Plumbing have a right of first refusal to purchase the assets of a franchise?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
- (h) A provision that requires the franchisee to resell to the franchisor items that are not uniquely identified with the franchisor. This subdivision does not prohibit a provision that grants to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in subdivision (c).
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, Benjamin Franklin Plumbing is permitted to exercise a right of first refusal to purchase the assets of a franchise. This means that if a franchisee decides to sell their Benjamin Franklin Plumbing franchise, they must first offer Benjamin Franklin Plumbing the opportunity to buy the franchise on the same terms and conditions as a legitimate third-party offer.
This right of first refusal does not allow Benjamin Franklin Plumbing to purchase items that are not uniquely identified with the franchisor, but they can purchase the assets of a franchise on the same terms as a third party. This provision also allows Benjamin Franklin Plumbing to acquire the assets at market or appraised value if the franchisee has breached the franchise agreement and failed to correct the breach.
For a prospective franchisee, this means that selling the franchise may involve an extra step of offering it to Benjamin Franklin Plumbing before finalizing a sale with another buyer. It is important to understand the conditions under which Benjamin Franklin Plumbing can exercise this right, as it could impact the franchisee's ability to sell the business to their preferred buyer.