Does Best Brains have the right of first refusal to acquire a franchisee's business?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| performance may be required; and right of first refusal declined by us. (also see r below). | ||
| n. Franchisor’s right of first refusal to acquire franchisee’s business | Section 9.D | We can match any offer for your business, except broker’s fees are excluded. Cash may be substituted for any form of payment proposed. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 32–34)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, Best Brains does have the right of first refusal to acquire a franchisee's business. Specifically, Best Brains can match any offer a franchisee receives for their business, excluding broker's fees. Furthermore, Best Brains can substitute cash for any proposed form of payment. This right is detailed in Section 9.D of the franchise agreement.
This provision means that if a Best Brains franchisee decides to sell their business and receives an offer from a third party, they must first present that offer to Best Brains. Best Brains then has the option to purchase the franchise on the same terms as the third-party offer, but without having to pay any broker's fees that might be included in the offer.
For a prospective franchisee, this right of first refusal could impact their exit strategy. While it doesn't prevent a sale, it does give Best Brains control over who ultimately purchases the franchise. This could potentially limit the pool of buyers or affect the negotiation process. However, it also provides a guaranteed potential buyer in Best Brains itself, which could simplify the selling process.
It is important for prospective franchisees to carefully consider this provision and understand its implications for their future plans. They should also seek legal counsel to fully understand their rights and obligations under the franchise agreement.