How does Chocolate Fish Franchising exercise its right of first refusal?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.5 Chocolate Fish Franchising's Right of First Refusal. Before Franchisee (or any Owner) engages in a Transfer (except under Section 15.3, to a co-Owner, or to a spouse, sibling, or child of an Owner), Chocolate Fish Franchising will have a right of first refusal, as set forth in this Section.
Franchisee (or its Owners) shall provide to Chocolate Fish Franchising a copy of the terms and conditions of any Transfer.
For a period of 30 days from the date of Chocolate Fish Franchising's receipt of such copy, Chocolate Fish Franchising will have the right, exercisable by notice to Franchisee, to purchase the assets subject of the proposed Transfer for the same price and on the same terms and conditions (except that Chocolate Fish Franchising may substitute cash for any other form of payment).
If Chocolate Fish Franchising does not exercise its right of first refusal, Franchisee may proceed with the Transfer, subject to the other terms and conditions of this Article.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, Chocolate Fish Franchising has a right of first refusal before a franchisee engages in a transfer of their franchise, with some exceptions. These exceptions include transfers under Section 15.3, to a co-owner, or to a spouse, sibling, or child of an owner.
To exercise this right, the franchisee must provide Chocolate Fish Franchising with a copy of the terms and conditions of the proposed transfer. Chocolate Fish Franchising then has 30 days from the date of receiving this information to exercise its right to purchase the assets subject to the transfer.
Chocolate Fish Franchising can exercise this right by notifying the franchisee and purchasing the assets under the same price, terms, and conditions as the proposed transfer. However, Chocolate Fish Franchising has the option to substitute cash for any other form of payment. If Chocolate Fish Franchising does not exercise its right of first refusal within the 30-day period, the franchisee can proceed with the transfer, provided they comply with all other terms and conditions outlined in the franchise agreement.