Can Counselor Realty negotiate the terms of the proposed transfer with the Counselor Realty franchisee and the proposed transferee?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
9.6 Right of First Refusal. If you (or any subsequent Franchisee) propose a transfer governed by this Article 9, in whole or in part, to any third party in response to a bona fide offer from such third party, you shall first offer to sell to Counselor your said interest as provided herein. You shall obtain from the third party offeror and deliver to us a statement in writing, signed by the offeror and by you of all of the terms of the offer. Counselor has 30 days from its receipt of the statement to accept the offer by delivering written notice of acceptance to you. The acceptance shall be on the same price and terms stated in the third party offer except that Counselor may confer with you and the proposed transferee and negotiate the terms of the proposed transfer without thereby impairing the right of first refusal, and Counselor may substitute cash in the fair market value of any non-cash consideration offered by the third party. If Counselor fails to accept the offer within the 30-day period, you shall be free for 60 days after such period to effect the disposition described in the statement delivered to Counselor provided that such transfer is in accordance with Article 9 of this Agreement; but you shall effect no other or subsequent sale or assignment of this Agreement or the business conducted hereunder without first offering the same to Counselor in accordance with this paragraph.
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
According to the 2025 Counselor Realty Franchise Disclosure Document, Counselor Realty has the right to negotiate the terms of a proposed franchise transfer with both the franchisee and the potential transferee. Specifically, if a franchisee receives a legitimate offer from a third party to buy their franchise, they must first offer Counselor Realty the right of first refusal to purchase the franchise on the same terms.
Counselor Realty has 30 days to accept this offer. During this period, Counselor Realty can confer with the franchisee and the proposed transferee to negotiate the terms of the transfer without affecting their right of first refusal. This means Counselor Realty can try to reach a mutually agreeable arrangement with both parties involved in the potential transfer.
If Counselor Realty declines to exercise its right of first refusal within the 30-day period, the franchisee is then free to proceed with the transfer to the third party, provided the transfer occurs within 60 days and adheres to the conditions outlined in Article 9 of the Franchise Agreement. This clause ensures that Counselor Realty maintains control over who enters their franchise system and under what terms, while also allowing franchisees to sell their businesses if Counselor Realty does not exercise its right to purchase.