Does Bombs Away Franchising have a right of first refusal before a Bombs Away franchisee engages in a transfer of the business?
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 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away Franchising does have a right of first refusal before a franchisee engages in a transfer of the business. Before a franchisee or any owner engages in a transfer, with some exceptions, Bombs Away Franchising has the right to purchase the assets subject to the proposed transfer.
The franchisee must provide Bombs Away Franchising with a copy of the terms and conditions of any transfer. Bombs Away Franchising then has 30 days from the date of receipt to exercise its right to purchase the assets. This purchase would be for the same price and on the same terms and conditions as the proposed transfer, although Bombs Away Franchising can substitute cash for any other form of payment.
If Bombs Away Franchising chooses not to exercise its right of first refusal within the 30-day period, the franchisee may proceed with the transfer, subject to all other terms and conditions outlined in the franchise agreement. This right of first refusal allows Bombs Away Franchising to maintain control over who enters the franchise system and ensures that any transfer aligns with their strategic interests.