Does Bombs Away have a right of first refusal to purchase the assets of a franchise?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause.
This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise.
Source: Item 23 — RECEIPTS (FDD pages 36–117)
What This Means (2024 FDD)
According to the 2024 Bombs Away FDD, Bombs Away has a right of first refusal to purchase a franchise. Specifically, the FDD states that the franchise agreement can include a provision that allows Bombs Away to purchase the franchise if the franchisee attempts to transfer ownership. This right of first refusal allows Bombs Away to match the terms of a legitimate offer from a third party who wants to buy the franchise.
This provision does not prevent Bombs Away from exercising a right of first refusal to purchase the franchise. This means that if a franchisee wants to sell their Bombs Away franchise to someone else, Bombs Away has the first opportunity to buy the franchise on the same terms offered by the potential buyer.
For a prospective franchisee, this means that selling the franchise may require Bombs Away's approval, and Bombs Away could potentially step in and purchase the franchise themselves, preventing the sale to the third party. This is a fairly standard practice in franchising, giving Bombs Away some control over who enters the system and ensuring that the terms of sale are acceptable to them.