Does the Bombs Away franchise agreement require the franchisee to resell items that are not uniquely identified with Bombs Away?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (h) A provision that requires the franchisee to resell to the franchisor items that are not uniquely identified with the franchisor.
This subdivision does not prohibit a provision that grants to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this
Source: Item 23 — RECEIPTS (FDD pages 36–117)
What This Means (2024 FDD)
According to the 2024 Bombs Away Franchise Disclosure Document, the franchise agreement cannot require a franchisee to resell items to Bombs Away that are not uniquely identified with the franchisor. This provision protects franchisees from being forced to buy back generic or unbranded inventory that may be difficult to resell.
However, the FDD clarifies that this restriction does not prevent Bombs Away from having a right of first refusal to purchase the assets of a franchise on the same terms as a third party. Nor does it prevent Bombs Away from acquiring the assets at market or appraised value if the franchisee has breached the franchise agreement and failed to correct the breach.
This means that while Bombs Away cannot force a franchisee to buy back unbranded items, they can still purchase the franchise's assets under certain conditions, such as a third-party offer or a breach of contract by the franchisee. This ensures that Bombs Away retains some control over the franchise's assets while protecting the franchisee from unfair buyback requirements.