Is a transfer to a co-owner exempt from Bombs Away Franchising's right of first refusal?
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, a transfer to a co-owner is exempt from Bombs Away Franchising's right of first refusal. Bombs Away Franchising has the right of first refusal before a franchisee engages in a transfer. However, this does not apply under Section 15.3, or to a co-owner, or to a spouse, sibling, or child of an owner.
This means that if a Bombs Away franchisee wishes to transfer ownership to a co-owner, Bombs Away Franchising cannot step in and purchase the assets themselves under the same terms offered to the co-owner. This provides flexibility for franchisees who may want to adjust ownership structures with existing partners without franchisor intervention.
However, it is important to note that while Bombs Away Franchising waives its right of first refusal in these specific cases, other transfer requirements outlined in Article 15 of the franchise agreement may still apply. A franchisee should carefully review all transfer provisions to ensure full compliance when transferring ownership, even to a co-owner.