What is the deadline for completing the sale to the purchaser after Brain Balance declines its right of first refusal?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
16.03. If COMPANY does not exercise this right of first refusal, FRANCHISEE may complete the sale to such purchaser pursuant to and on the terms of said offer, subject to COMPANY's prior written approval of the purchaser as provided herein. However, if the sale to such purchaser is not completed within one hundred twenty (120) days after delivery of such offer to COMPANY, or upon substantially the same terms of the sale as specified in such offer, COMPANY shall again have the right of first refusal as herein provided.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, if Brain Balance chooses not to exercise its right of first refusal, a franchisee has a limited time to finalize the sale of their franchise to the proposed purchaser. Specifically, the sale must be completed within one hundred twenty (120) days after Brain Balance receives the offer.
This 120-day deadline is crucial. If the sale is not completed within this timeframe, or if the terms of the sale change substantially from the original offer, Brain Balance retains the right to a new first refusal opportunity. This means the franchisee would have to resubmit the offer to Brain Balance, potentially delaying or complicating the sale process.
This clause protects Brain Balance by ensuring that any transfer of ownership meets their standards and occurs within a reasonable period. For a franchisee, it highlights the importance of having a solid purchase agreement and being prepared to close the deal promptly once Brain Balance waives its right of first refusal. Franchisees should factor this timeline into their negotiations and planning to avoid triggering another right of first refusal for Brain Balance.