Does Chocolate Fish Coffee have a right of first refusal before a franchisee engages in a transfer?
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 Coffee does have a right of first refusal before a franchisee engages in a transfer. Before a franchisee or any owner engages in a transfer, with some exceptions, Chocolate Fish Coffee has the right to first refusal.
The franchisee must provide Chocolate Fish Coffee with a copy of the terms and conditions of any transfer. Chocolate Fish Coffee then has 30 days from the date of receipt to exercise its right to purchase the assets under the same terms and conditions, but can substitute cash for any other form of payment.
There are exceptions to Chocolate Fish Coffee's right of first refusal. These exceptions include transfers under Section 15.3, to a co-owner, or to a spouse, sibling, or child of an owner. If Chocolate Fish Coffee does not exercise its right of first refusal within the 30-day period, the franchisee may proceed with the transfer, provided they adhere to all other terms and conditions outlined in the franchise agreement.