What is the process for Big Air Trampoline Park to exercise its right of first refusal?
Big_Air_Trampoline_Park Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.1 Unless otherwise explicitly provided by this Agreement, Franchisor shall be entitled to exercise the rights provided in this Section immediately upon:
- (a) The expiration without extension of Franchisee's rights to operate the Big Air Trampoline Business or the termination for any reason of the License or this Agreement;
- (b) Any breach, default or other event that gives Franchisor the right to terminate the License or this Agreement, after expiration of any applicable notice and cure period; or
- (c) The receipt by Franchisor of a copy of a Purchase Offer.
- 16.2 Upon any event described in Subsection 16.1, Franchisor shall have the option to purchase all of Franchisee's rights, title and interest in the Big Air Trampoline Business, and all its improvements, furniture, fixtures, equipment and products, and all of Franchisee's accounts, contract rights, customer and vendor lists, work in progress and other business assets.
- 16.3 The purchase price for assets itemized in Subsection 16.2 will be, subject to Section 16.4: (i) the current fair market value if Subsection 16.1(a) or 16.1(b) is applicable; or (ii) the price specified in the Purchase Offer received by Franchisee if Subsection 16.1(c) is applicable. If Franchisee and Franchisor cannot agree on fair market value within a reasonable time, an independent appraiser will be designated by Franchisee and Franchisor and an average of the two appraised values will be binding.
Appraised values will exclude any and all consideration for goodwill or going concern value created by the Marks and business system licensed to Franchisee.
- 16.4 If Franchisor elects to exercise any option to purchase provided in this Section 16, Franchisor will have the right to set off all amounts due from Franchisee under the Franchise Agreement or any other agreements between the parties, any commissions or fees payable to any broker, agent or other intermediary and the cost of the appraisal, if any, against any payment.
Franchisee shall also have the right to substitute cash for any other form of consideration specified in the Purchase Offer and to pay in full the entire purchase price at the time of closing.
- 16.5 Franchisor will notify Franchisee of its intention to exercise or not exercise its rights to purchase ("Notice of Intent") within 60 days following an event described in Subsection 16.1(a) or (b) or within 15 days following an event described in Subsection 16.1(c).
The Notice of Intent will specify the assets to be purchased, and the current fair market value as determined by Franchisor if Subsection 16.1(a) or 16.1(b) is applicable.
In the event Franchisor is purchasing the assets pursuant to Subsections 16.1(a) or (b), Franchisee will have 14 days following receipt of Franchisor's Notice of Intent to object to any of the prices specified therein, and any disputes over pricing shall be resolved through appraisal as specified by Subsection 16.3.
If Franchisor declines to exercise its rights under this Section within the 15 or 60 day period described above, as applicable, Franchisee may thereafter sell or dispose of the Big Air Trampoline Business to any third party in the event of a sale under Subsection 16.1(a) or 16.1(b) or to the third party identified in the Purchase Offer in the event of a sale under Subsection 16.1(c), but not at a lower price nor on more favorable terms than set forth in the Purchase Offer, if any, or the Notice of Intent and subject to the prior written permission of Franchisor and satisfaction of the other conditions to assignment set forth in Section 15.
If the sale to such third party purchaser is not completed within 90 days after Franchisor delivers the Notice of Intent to Franchisee, Franchisor shall again have the right of first refusal provided in this Agreement.
- 16.6 If Franchisor provides Franchisee with its Notice of Intent to exercise its rights under this Section 16, the purchase and sale contemplated in this Section shall be consummated as soon as possible.
In the event Franchisor is purchasing the assets pursuant to Subsections 16.1(a) or (b), following the delivery of a Notice of Intent as specified in Subsection 16.5, Franchisor or Franchisor's designee shall have the immediate right to take possession of the Big Air Trampoline Business and to carry on and develop the Big Air Trampoline Business for the exclusive benefit of Franchisor or its designee.
Source: Item 23 — RECEIPT (FDD pages 53–255)
What This Means (2025 FDD)
According to Big Air Trampoline Park's 2025 Franchise Disclosure Document, the franchisor has the right of first refusal to purchase the franchisee's Big Air Trampoline Business under certain conditions. These conditions include the expiration or termination of the franchise agreement, any breach that gives the franchisor the right to terminate the agreement, or the receipt of a purchase offer by the franchisor.
Upon any of these events, Big Air Trampoline Park has the option to purchase all of the franchisee's rights, title, and interest in the Big Air Trampoline Business, including improvements, furniture, fixtures, equipment, products, accounts, contract rights, customer and vendor lists, work in progress, and other business assets. The purchase price will be the current fair market value if the option is exercised due to expiration or termination of the agreement or a breach thereof. If the option is triggered by a purchase offer received by the franchisee, the purchase price will be the price specified in that offer. If the franchisee and Big Air Trampoline Park cannot agree on fair market value, an independent appraiser will determine the value, excluding any consideration for goodwill created by the Big Air Trampoline Park's marks and business system.
Big Air Trampoline Park must notify the franchisee of its intention to exercise or not exercise its purchase rights within 60 days following an event related to the expiration, termination, or breach of the agreement, or within 15 days following receipt of a purchase offer. This notification, called the Notice of Intent, will specify the assets to be purchased and the determined fair market value. The franchisee then has 14 days to object to the prices, with any disputes resolved through appraisal. If Big Air Trampoline Park declines to exercise its rights within the specified period, the franchisee may sell the business to a third party, provided the terms are no more favorable than those in the purchase offer or the Notice of Intent, and subject to Big Air Trampoline Park's prior written permission and other conditions. If the sale to the third party is not completed within 90 days after Big Air Trampoline Park delivers the Notice of Intent, Big Air Trampoline Park again has the right of first refusal.
If Big Air Trampoline Park exercises its right of first refusal, the purchase and sale should be completed as soon as possible. Upon delivering the Notice of Intent, Big Air Trampoline Park has the immediate right to take possession of the Big Air Trampoline Business and continue its operation for the franchisor's benefit. Big Air Trampoline Park can also offset any amounts due from the franchisee, commissions, fees, and appraisal costs against any payment. The franchisee can substitute cash for any other form of consideration in the purchase offer and pay the entire purchase price at closing.