What is the 'Trigger Date' for Burros Fries's right of first refusal?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
We may, by delivering written notice to Franchisee or its Owners within thirty (30) days after we receive both an exact copy of the offer and the Preliminary Due Diligence Package (the date on which we have received the exact copy of the offer and the Preliminary Due Diligence Package is called the "Trigger Date"), notify Franchisee of our non-binding preliminary intent to purchase or not to purchase the interest proposed to be sold. The "Preliminary Due Diligence Package" is information and copies of documents (where applicable) that Franchisee supplies to us which consists of Franchisee's Business financial statements (including weekly and monthly revenue information) for the preceding three (3) years, a copy of the Business's current lease or sublease (if applicable and if we do not already have it), information about the number and compensation of employees working at the Business, the Franchisee's merchant account printouts for the past three (3) years, the Franchisee's bank statements for the past three (3) years along with a description of competing restaurants or food service businesses offering similar Products and Services operating within the Territory or Non-Traditional Location (if operating a Non-Traditional Location). If we notify Franchisee within thirty (30) days after the Trigger Date (the "First Notice Deadline") that we are preliminarily interested in exercising our right of first refusal, we will have an additional thirty (30) days after the First Notice Deadline both to conduct our due diligence and then to
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, the Trigger Date is defined as the date on which Burros Fries receives both an exact copy of the offer for the sale of the franchise and the Preliminary Due Diligence Package from the franchisee. This date is significant because it starts the clock for Burros Fries to decide whether to exercise its right of first refusal to purchase the franchise interest.
The Preliminary Due Diligence Package includes specific financial and operational documents that the franchisee must provide to Burros Fries. These documents consist of the franchisee's business financial statements (including weekly and monthly revenue information) for the preceding three years, a copy of the business's current lease or sublease (if applicable and if Burros Fries does not already have it), information about the number and compensation of employees working at the business, the franchisee's merchant account printouts for the past three years, and the franchisee's bank statements for the past three years, along with a description of competing restaurants or food service businesses offering similar Products and Services operating within the Territory or Non-Traditional Location (if operating a Non-Traditional Location).
Within thirty days after the Trigger Date, Burros Fries must notify the franchisee of its preliminary intent to purchase or not to purchase the interest. If Burros Fries expresses preliminary interest, it has an additional thirty days after the initial thirty-day period (the "First Notice Deadline") to conduct further due diligence and make a final decision. This process ensures that Burros Fries has a defined period to evaluate the proposed transfer and protect its interests in the franchise system.