If Bombs Away has a right of first refusal to purchase assets, what terms apply?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
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
subdivision prohibit a provision that grants the franchisor the right to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in subdivision (c).
Source: Item 23 — RECEIPTS (FDD pages 36–117)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away has the right of first refusal to purchase the assets of a franchise. This means that if a franchisee receives a legitimate offer from a third party to buy their franchise assets, Bombs Away has the option to match that offer and purchase the assets themselves.
The terms of Bombs Away's right of first refusal are that Bombs Away can purchase the assets on the "same terms and conditions as a bona fide third party willing and able to purchase those assets". This protects Bombs Away's interests in maintaining control over its brand and franchise network.
This right of first refusal does not prevent Bombs Away from acquiring the assets of a franchise for the market or appraised value if the franchisee has breached the franchise agreement and failed to correct the breach. This provides Bombs Away with an additional mechanism to regain control of a franchise in cases of franchisee non-compliance.