What happens if there is a material change in the terms of the sale of a Casiola franchise?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
If Franchisee or an Owner desire to engage, in whole or in part, in a Transfer of Franchisee, this Agreement, Franchisee's Casiola Business, Franchisee's non-residential Administrative Office, and/or Franchisee's Administrative Office, then Franchisee or such Owner (as applicable) must obtain a bona fide, signed written offer from the fully disclosed purchaser (the "Offer") and submit an exact copy of the Offer to Franchisor. Franchisor shall have 30 days after receipt of the Offer to decide whether Franchisor will purchase the interest in Franchisee, Franchisee's Casiola Business, Franchisee's non-residential Administrative Office, and/or Franchisee's Administrative Office for the same price and upon the same terms contained in the Offer (however, Franchisor may substitute cash for any form of payment proposed in the Offer). If Franchisor notifies Franchisee that Franchisor intends to purchase the interest within said 30 day period, Franchisee or Owner (as applicable) must sell the interest to Franchisor. Franchisor will have at least an additional 60 days to prepare for closing. Franchisor shall be entitled to receive from Franchisee or Owner (as applicable) all customary representations and warranties given by Franchisee or Owner (as applicable) as the seller of the assets and/or the ownership interest or, at Franchisor's election, the representations and warranties contained in the offer. If Franchisor does not exercise its right of first refusal, Franchisee or Owner (as applicable) may complete the Transfer to the purchaser pursuant to and in accordance with the terms of the Offer, provided that separate and apart from this Article 14.F. right of first refusal, Franchisee complies with the terms of this Article 14. However, if the sale to the purchaser is not completed within 120 days after delivery of the Offer to Franchisor, or there is a material change in the terms of the sale, Franchisor will again have the right of first refusal specified in this Article 14.F. Franchisor's right of first refusal in this Article 14.F. shall not apply to any Transfer pursuant to Article 14.E. of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, if a franchisee or owner wants to transfer their Casiola business, agreement, or administrative office, they must first get a written offer from a purchaser and give a copy to Casiola. Casiola then has 30 days to decide if it wants to buy the interest for the same price and terms, although Casiola can pay in cash even if the offer proposes a different payment method.
If Casiola decides to purchase the interest, they have at least another 60 days to prepare for closing and are entitled to customary representations and warranties from the seller. If Casiola does not exercise its right of first refusal, the franchisee or owner can proceed with the transfer to the purchaser, as long as they comply with all other transfer terms in the agreement.
However, if the sale isn't completed within 120 days after Casiola received the offer, or if there's a material change in the terms of the sale, Casiola has the right of first refusal again. This means that any significant changes to the deal terms or a failure to close the sale promptly gives Casiola another chance to buy the franchise before it's sold to someone else. This right of first refusal does not apply to transfers made under Article 14.E of the agreement.