How must Big Apple Bagels Franchisor exercise its right of first refusal?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. Franchisor's Right of First Refusal. If Developer or its owners shall at any time determine to sell an interest in this Agreement or a controlling ownership interest in Developer, Developer or its owners shall obtain a bona fide, executed written offer from a responsible and fully disclosed purchaser and shall immediately submit an exact copy of the offer to Franchisor. To be a valid, bona fide offer, the proposed purchase price must be in a dollar amount, and the proposed buyer must submit with its offer an earnest money deposit equal to at least five percent (5%) or more of the offering price. Franchisor shall have the right, exercisable by written notice delivered to Developer or its owners within thirty (30) days from the date of delivery of an exact copy of such offer to Franchisor, to purchase such interest for the price and on the terms and conditions contained
in such offer, provided that Franchisor may substitute cash for any form of payment proposed in such offer. Franchisor's credit shall be deemed equal to the credit of any proposed purchaser. Franchisor shall have not less than sixty (60) days from the date of exercise of its right of first refusal to prepare for closing. Franchisor shall be entitled to purchase such interest subject to all customary representations and warranties given by the seller of the assets of a business or voting stock of an incorporated business, as applicable, including without limitation, representations and warranties as to ownership, condition and title to stock and/or assets. If Franchisor does not exercise its right of first refusal, Developer or its owners may complete the sale to such purchaser pursuant to and on the exact terms of such offer, subject to Franchisor's approval of the transfer, as provided in Paragraph 12.B. If the sale to such purchaser is not completed within ninety (90) days after delivery of such offer to Franchisor, or if there is a material change in the terms of the sale, Franchisor shall have an additional right of first refusal for thirty (30) days on the same terms and conditions as are applicable to the initial right of first refusal.
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, if a developer or its owners decide to sell their interest in the agreement or a controlling ownership in the developer, they must first obtain a legitimate, written offer from a responsible purchaser who is fully disclosed. The proposed purchase price must be a specific dollar amount, and the buyer must include an earnest money deposit of at least 5% of the offering price with their offer.
To exercise its right of first refusal, Big Apple Bagels must provide written notice to the developer or its owners within 30 days of receiving a copy of the offer. Big Apple Bagels has the right to purchase the interest at the same price, terms, and conditions as stated in the offer. However, Big Apple Bagels can substitute cash for any proposed form of payment. Big Apple Bagels' credit is considered equal to that of any proposed purchaser.
Big Apple Bagels has at least 60 days from the date it exercises its right of first refusal to prepare for the closing. Big Apple Bagels is entitled to purchase the interest subject to customary representations and warranties given by the seller, including those related to ownership, condition, and title to stock or assets. If Big Apple Bagels does not exercise its right of first refusal, the developer can proceed with the sale to the original purchaser, subject to Big Apple Bagels' approval of the transfer. If the sale is not completed within 90 days or if there is a material change in the terms, Big Apple Bagels has an additional 30-day right of first refusal under the same terms and conditions.