How long does Big Apple Bagels Franchisor have to 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 franchisee or its owners decide to sell their interest in the franchise or a controlling ownership interest, they must first obtain a bona fide, executed written offer from a responsible and fully disclosed purchaser. This offer must include a proposed purchase price in a dollar amount and an earnest money deposit of at least 5% of the offering price.
The Big Apple Bagels franchisor then has the right to purchase the interest themselves, exercisable by written notice delivered to the franchisee or its owners within thirty (30) days from the date the franchisor receives a copy of the offer. This allows Big Apple Bagels to maintain control over who becomes a franchisee and ensures that any new owner meets their standards.
Furthermore, the franchisor has not less than sixty (60) days from the date of exercise of its right of first refusal to prepare for closing. If the sale to the initial purchaser is not completed within ninety (90) days after the offer is delivered to Big Apple Bagels, or if there is a material change in the terms of the sale, the franchisor has an additional right of first refusal for thirty (30) days under the same terms and conditions.