Does a Bombs Away franchisee receive rights of first refusal to acquire additional franchises?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.5 Bombs Away Franchising's Right of First Refusal. Before Franchisee (or any Owner) engages in a Transfer (except under Section 15.3, or to a co-Owner, or to a spouse, sibling, or child of an Owner), Bombs Away Franchising will have a right of first refusal, as set forth in this Section. Franchisee (or its Owners) shall provide to Bombs Away Franchising a copy of the terms and conditions of any Transfer. For a period of 30 days from the date of Bombs Away Franchising's receipt of such copy, Bombs Away Franchising will have the right, exercisable by notice to Franchisee, to purchase the assets subject of the proposed Transfer for the same price and on the same terms and conditions(except that Bombs Away Franchising may substitute cash for any other form of payment). If Bombs Away Franchising does not exercise its right of first refusal, Franchisee may proceed with the Transfer, subject to the other terms and conditions of this Article.
Source: Item 12 — TERRITORY (FDD pages 23–24)
What This Means (2024 FDD)
Based on the 2024 Bombs Away Franchise Disclosure Document, the document does not specify whether a franchisee has a right of first refusal to acquire additional Bombs Away franchises. The FDD does outline Bombs Away's right of first refusal in the event that a franchisee seeks to transfer their existing franchise.
Specifically, Article 15.5 states that before a franchisee engages in a transfer of ownership, Bombs Away has a right of first refusal to purchase the assets of the franchise under the same terms and conditions as the proposed transfer. Bombs Away has 30 days from the receipt of the transfer terms to exercise this right by notifying the franchisee. If Bombs Away declines to exercise its right of first refusal, the franchisee may proceed with the transfer, subject to other conditions in the agreement.
Because the FDD does not address the right to acquire additional franchises, prospective Bombs Away franchisees should directly ask the franchisor about opportunities for growth and expansion, and whether franchisees are given priority or preference when opening new locations.