Under what conditions can Byrider exercise its right of first refusal regarding a Control Assignment?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
a security interest in (i) the ownership interests of Franchisee or its owners, as applicable, or (ii) this Agreement, in any manner whatsoever, unless (a) the Company provides its prior written consent, which consent may be withheld for any reason whatsoever in the Company's sole judgment and (b) the secured party agrees that its claims will be subordinate to all amounts the Franchisee owes at any time to the Company or its affiliates.
ARTICLE XV
RIGHT OF FIRST REFUSAL
- 15.1 Procedure Regarding Right of First Refusal and Assignment. If the Franchisee (or any of its owners) at any time determine to effectuate a Control Assignment, the Franchisee agrees to obtain from a responsible and fully disclosed buyer, and send to Company a true and complete copy of a bona fide, executed written offer (which may include a letter of intent) relating exclusively to the Control Assignment. 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.
- 15.2 Right of First Refusal. Within thirty (30) days after the Company's receipt of the bona fide written offer and all other information the Company requests (the "Review Period"), the Company shall have the right, by written notice to the Franchisee, to cause the Control Assignment to be made to itself or to its nominee upon the terms and conditions contained in the written offer except that the Company shall be allowed to pay the equivalent cash value of any consideration specified in the notice, and Franchisee will be required to grant the customary warranties and representations to the Company. The failure of the Company to deliver such notice within the Review Period shall constitute a waiver of its right of first refusal. In the event the Control Assignment is to Franchisee's (or the transferring owner's) family members, then this Article XV shall not apply.
- 15.3 Company Objections/Conditions to Assignment. If the Company does not exercise its said right of first refusal it shall have the right, but not the obligation, to deliver to the Franchisee, no later than the expiration of the Review Period, written notice of any objection it has, or any conditions it will impose upon, the proposed assignment. The failure of the Company to deliver such notice within the Review Period shall constitute a consent to the proposed assignment but without waiver of any other rights the Company has under this Agreement.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Byrider has the right of first refusal regarding a Control Assignment under specific conditions. If a franchisee (or any of its owners) decides to pursue a Control Assignment, they must first obtain a bona fide, executed written offer from a responsible buyer and provide a complete copy to Byrider. This offer must detail the payment terms of the proposed sale, including the sources and terms of any financing for the purchase price.
Within thirty (30) days of receiving the offer and any additional information requested by Byrider, Byrider has the option to exercise its right of first refusal. Byrider can provide written notice to the franchisee, indicating its intention to have the Control Assignment made to itself or its nominee. The terms and conditions will be those outlined in the written offer, although Byrider is allowed to pay the equivalent cash value for any non-cash consideration. The franchisee is then required to provide customary warranties and representations to Byrider.
If Byrider does not deliver a notice of intent to exercise its right of first refusal within the 30-day review period, this is considered a waiver of that right. However, even if Byrider waives its right of first refusal, it still has the option to object to the proposed assignment or impose conditions on it, provided it notifies the franchisee in writing before the review period expires. If the terms of the Control Assignment are materially changed after Byrider has waived its right of first refusal, the changed terms are considered a new offer, and Byrider once again has the right of first refusal. If the franchisee fails to complete the Control Assignment within ninety (90) days after the review period, it is considered a new proposal, and Byrider's right of first refusal is reinstated.