Does Counselor Realty have an option to purchase a franchisee's business?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section(s) in Franchise or Other Agreement | Summary |
|---|---|---|
| j. Assignment of contract by franchisor | Section 9.4 | Counselor may transfer its interest in Franchise Agreement by notice to you |
| k. "Transfer" by franchisee -- definition | Section 9.1 | Includes transfer of your interest in Franchise Agreement, the Office, Business or Business assets, or an interest in your business entity or your owners |
| l. Franchisor approval of transfer by franchisee | Section 9.1 | Counselor has the right to consent to all transfers (other than a transfer of less than a majority interest in your business entity or your owners) and will consent if Counselor deems transferee qualified and conditions specified in Franchise Agreement are satisfied |
| m. Conditions for franchisor approval of transfer | Sections 9.1, 9.2 | Transferee qualifies; payment of transfer fee; payment of all amounts owing; renovation to then-current System standards; execution of guaranty by buyer's shareholders or owners |
| n. Franchisor's right of | Section 9.6 | Counselor has the right of first |
| first refusal to acquire | refusal to match any offer for your | |
| franchisee's business | Business | |
| o. Franchisor's option to | Not applicable | Not applicable |
| purchase franchisee's | ||
| business |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 25–29)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, Counselor Realty does not have an option to purchase a franchisee's business. However, Counselor Realty does have the right of first refusal to acquire a franchisee's business. This means that if a franchisee receives an offer to purchase their Counselor Realty business, they must first offer Counselor Realty the opportunity to match that offer.
This right of first refusal allows Counselor Realty to maintain control over who enters the franchise system and ensures that any new franchisee meets their standards. It also gives Counselor Realty the option to expand its company-owned operations by acquiring successful franchise locations. For a franchisee, this means that selling their business may involve an extra step, as they need to give Counselor Realty the chance to buy it before finalizing a sale with another party.
Typically, a right of first refusal is less restrictive than an option to purchase, as it only comes into play when the franchisee has already found a potential buyer. An option to purchase would give Counselor Realty the unilateral right to buy the business at a predetermined price or valuation, regardless of whether the franchisee is looking to sell. The absence of an option to purchase in the franchise agreement provides the franchisee with more flexibility in deciding when and to whom they sell their business, subject to Counselor Realty's right of first refusal and approval of the transferee.