Does Burros Fries have a right of first refusal for transfer, sale, or assignment of the franchise?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
any type of ownership interest in the Franchisee or Franchised Business on the grounds that the proposed transferee has, in our sole opinion, taken on too much debt.
C. Transfer, Sale or Assignment by Franchisor and Franchisor's Right of First Refusal
Franchisee acknowledges that we have an unrestricted right to sell, transfer or assign its rights or obligations under this Agreement to any transferee or legal successor of ours.
We have a right of first refusal regarding any proposed sale, assignment or transfer by Franchisee subject to this Agreement. During the term of this Agreement, if Franchisee, any of its Owners wish to sell, assign or otherwise transfer an interest in this Agreement, the Franchised Business and/or its assets, or an ownership interest in Franchisee (collectively, the "Interest"), then Franchisee will comply with the requirements of Sections 22.B, 22.C and 22.E of this Agreement.
Franchisee will notify us within ten (10) days after Franchisee has commenced discussions or communications even if preliminary, regarding such a proposed sale, assignment or transfer and then send us written updates of the status of such discussions or communications every thirty (30) days thereafter unless and until such discussions or communications have ceased, in which case Franchisee must notify us in writing within five (5) business days that such discussions or communications have ceased. Whether the discussions have ceased or not, at our option, we may require Franchisee to send us, by certified mail or other receipted delivery, copies of any materials or information sent to the proposed buyer or transferee regarding the possible transaction as well as any materials Franchisee sends to the buyer or transferee. Before agreeing to any such transaction, Franchisee and its Owners agree to obtain from a responsible and fully disclosed buyer, and then send us, a true and complete copy of a bona fide, executed written offer (which may include a letter of intent) relating to any proposed transfer. The offer must include details of the payment terms of the proposed sale and the sources and terms of any financing for the proposed purchase price. The bona fide offer with the proposed purchase price must be in a dollar amount, and the proposed buyer must submit with its offer a five thousand dollar ($5,000) earnest money deposit (if a proposed disposition is part of a transaction involving additio
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, Burros Fries retains a right of first refusal regarding any proposed sale, assignment, or transfer of the franchise by the franchisee. If a franchisee or any of its owners wish to sell, assign, or transfer an interest in the Franchise Agreement, the franchised business, its assets, or an ownership interest in the franchisee, they must comply with specific requirements outlined in the agreement.
The franchisee is obligated to notify Burros Fries within ten days after commencing discussions or communications, even if preliminary, regarding a proposed sale, assignment, or transfer. Following this initial notification, the franchisee must provide written updates on the status of these discussions or communications every thirty days until the discussions cease. If the discussions cease, the franchisee must notify Burros Fries in writing within five business days. Burros Fries has the option to require the franchisee to send copies of any materials or information sent to the proposed buyer or transferee regarding the possible transaction.
Before agreeing to any transaction, the franchisee and its owners must obtain a bona fide, executed written offer from a responsible and fully disclosed buyer and send a copy to Burros Fries. The offer must include details of the payment terms and the sources and terms of any financing for the proposed purchase price. The offer must be in a dollar amount, and the proposed buyer must submit a $5,000 earnest money deposit with the offer. If the proposed disposition involves additional franchised businesses operating under other franchise agreements or license agreements with Burros Fries, the proposed buyer must pay the franchisee this earnest money deposit for each franchise involved.