Can Buona assign its right of first refusal to purchase a Buona franchise to another party?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
15.9.1 Franchisee grants to Franchisor the right, but not the obligation, to acquire the Franchised Business on the same terms and conditions specified in a bona fide written offer from a qualified third party. However, Franchisor may substitute the cash equivalent for any portion of the purchase price to be paid by non-cash consideration. Franchisor may purchase the interest for itself or assign its right without recourse to a nominee who will purchase the interest directly from Franchisee. Franchisee shall notify Franchisor in writing of the terms and conditions of each proposed transfer, including the interest proposed to be transferred, the purchase price or other consideration to be paid, any financing terms being extended by Franchisee, the date of the proposed transfer and all other pertinent provisions of the proposed sale. In addition, a copy of the contract, agreement, memorandum of sale, deposit receipt, or letter of intent shall also be forwarded to Franchisor as soon as it is received by Franchisee. Following its receipt of all pertinent data and documents concerning the proposed transfer, including any additional data concerning the transaction requested by Franchisor from Franchisee, Franchisor shall have thirty (30) days within which to advise Franchisee in writing of Franchisor's election to acquire the interest proposed to be transferred on the same terms and conditions agreed to by the prospective transferee. Should Franchisor elect to acquire the interest proposed to be transferred pursuant to its right of first refusal, Franchisee and Franchisor shall cooperate to consummate the transfer. The date for the completion of the transfer may be extended at Franchisor's option for up to thirty (30) days beyond the date originally indicated for the completion of the transfer in order to allow the completion of the transaction in a manner more convenient to Franchisor. The above right of first refusal provisions shall apply to any sale, pledge, assignment, trade or transfer of any ownership interests in the Entity.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Buona has the right to acquire a franchised business and can assign its right of first refusal to another party. Specifically, Buona can purchase the interest in the franchise for itself or assign its right without recourse to a nominee who will purchase the interest directly from the franchisee.
This means that if a Buona franchisee decides to sell their business, they must first offer Buona the opportunity to buy it on the same terms as a legitimate offer from a third party. However, Buona isn't obligated to buy the franchise itself.
Instead, Buona can designate another party (a "nominee") to make the purchase. This nominee would then directly acquire the franchise from the franchisee. The franchisee is required to notify Buona in writing of the terms and conditions of each proposed transfer, including the interest proposed to be transferred, the purchase price or other consideration to be paid, any financing terms being extended by Franchisee, the date of the proposed transfer and all other pertinent provisions of the proposed sale. In addition, a copy of the contract, agreement, memorandum of sale, deposit receipt, or letter of intent shall also be forwarded to Franchisor as soon as it is received by Franchisee.
This clause protects Buona's interests by allowing it to control who enters its franchise system. It also provides flexibility for Buona, as it doesn't have to directly purchase the franchise but can instead facilitate a transfer to a party of its choosing.