What representations and warranties must a Bft Franchisee and its owners make when the Franchisor exercises its right of first refusal?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Within 30 days after Franchisor receives an exact copy of the bona fide offer and all information that Franchisor requests, Franchisor may, by written notice delivered to Franchisee or its selling owner(s), elect to purchase the interest offered for the price and on the terms and conditions contained in the offer. Franchisor may substitute any form of payment proposed in the offer as acceptable consideration. Franchisee and its owners must make all customary representations and warranties given by the seller of the assets of a business or the ownership interests in a legal entity, as applicable, and Franchisee and its selling owner(s) (and their immediate family members) must comply with the obligations regarding Competing Businesses, as though this Agreement had expired on the date of the purchase. Franchisor has the unrestricted right to assign this right of first refusal to its affiliate or an unaffiliated third party, who then will have the rights described in this Section 14.5.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, when Bft exercises its right of first refusal to purchase a franchisee's interest, the franchisee and its owners must provide customary representations and warranties. These are the same representations and warranties that would be given by a seller of a business's assets or ownership interests in a legal entity.
Additionally, the franchisee, its selling owners, and their immediate family members must adhere to the obligations regarding Competing Businesses. This adherence is mandated as if the Franchise Agreement had expired on the date of the purchase.
Bft also retains the right to assign its right of first refusal to an affiliate or an unaffiliated third party. If assigned, the affiliate or third party will then have the right to purchase the franchisee's interest under the same terms.