Does Big Air Trampoline Park have a right of first refusal to purchase a franchise in Michigan?
Big_Air_Trampoline_Park Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) A provision which permits us to refuse to permit a transfer of ownership of a franchise, except for good cause.
This subdivision does not prevent us from exercising a right of first refusal to purchase the franchise.
Good cause shall include, but is not limited to:
(i) The failure of the proposed transferee to meet our then-current reasonable qualifications or standards.
(ii) The fact that the proposed transferee is a competitor of us or our subfranchisor.
(iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
(iv) Your or proposed transferee's failure to pay any sums owing to us or to cure any default in the Franchise Agreement existing at the time of the proposed transfer.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to the 2025 FDD, Big Air Trampoline Park's franchise agreement includes provisions regarding the right of first refusal in the state of Michigan. Specifically, Michigan law states that a provision permitting Big Air Trampoline Park to refuse a transfer of ownership is acceptable as long as it is for good cause. The FDD clarifies that this does not prevent Big Air Trampoline Park from exercising a right of first refusal to purchase the franchise. Good cause includes the proposed transferee's failure to meet qualifications, being a competitor, unwillingness to comply with obligations, or failure to pay sums owed.
In practical terms, this means that if a Big Air Trampoline Park franchisee in Michigan decides to sell their franchise, Big Air Trampoline Park has the first opportunity to buy it themselves before the franchisee can sell to a third party. This right is contingent upon Big Air Trampoline Park offering the same terms and conditions as a bona fide third-party buyer.
This clause protects Big Air Trampoline Park's interests by allowing them to maintain control over who becomes a franchisee and preventing the franchise from falling into the hands of a competitor or someone who does not meet their standards. For a potential franchisee, this means that when they eventually decide to sell their Big Air Trampoline Park franchise, the pool of potential buyers might initially be limited to Big Air Trampoline Park itself, which could affect the sale price and terms.