How is Burros Fries' right of first refusal to purchase franchisee assets governed?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
We shall have the right of first refusal to purchase or assume Franchisee'sinterest in the Franchised Business, or in its assets on the same terms as those contained in a bona fide offer from a third party. As used in this Section, "Assets" means leasehold improvements, all kitchen equipment, furnishings, fixtures and technology items (as described in Section 12.I), signage, products, inventory (such as non-perishable products, ingredients, supplies, retail items in addition to all printed menus, advertising and marketing materials), vehicles (if applicable) and the lease or sublease for the Business. This right is governed by time limits and procedures described in this Agreement with respect to our right of first refusal in the event of an assignment. If we exercise our right of first refusal, Franchisee must transfer Franchisee's interest in the Franchised Business and in the Assets.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries' 2024 Franchise Disclosure Document, the franchisor has the right of first refusal to purchase a franchisee's interest in the franchised business or its assets. This means Burros Fries has the first opportunity to buy the business if a franchisee receives a legitimate offer from a third party. The terms offered by Burros Fries must match those of the third-party offer.
The term "Assets" includes leasehold improvements, all kitchen equipment, furnishings, fixtures and technology items, signage, products, inventory (such as non-perishable products, ingredients, supplies, retail items in addition to all printed menus, advertising and marketing materials), vehicles (if applicable) and the lease or sublease for the Business.
The FDD states that the specific time limits and procedures governing this right of first refusal are detailed elsewhere in the agreement. If Burros Fries exercises its right of first refusal, the franchisee is obligated to transfer their interest in the franchised business and its assets to Burros Fries.