Does Counselor Realty have a right of first refusal to acquire a Counselor Realty 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. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 25–29)
What This Means (2025 FDD)
According to the 2025 Counselor Realty Franchise Disclosure Document, Counselor Realty does have a right of first refusal to acquire a franchisee's business. Specifically, Section 9.6 of the franchise agreement stipulates that if a franchisee proposes a transfer of their interest to a third party in response to a legitimate offer, the franchisee must first offer to sell their interest to Counselor Realty.
The franchisee is required to provide Counselor Realty with a written statement containing all the terms of the third-party offer, signed by both the offeror and the franchisee. Counselor Realty then has 30 days from the receipt of this statement to accept the offer by providing written notice of acceptance to the franchisee. The acceptance must be on the same price and terms as the third-party offer. However, Counselor Realty can negotiate the terms of the proposed transfer with the franchisee and the proposed transferee without affecting its right of first refusal. Counselor Realty also has the option to substitute cash for the fair market value of any non-cash consideration offered by the third party.
If Counselor Realty does not accept the offer within the 30-day period, the franchisee is free to proceed with the disposition described in the statement to the third party for 60 days, provided that the transfer complies with Article 9 of the agreement. However, the franchisee cannot effect any other or subsequent sale or assignment of the agreement or the business without first offering it to Counselor Realty again under the same terms. This provision ensures that Counselor Realty has the opportunity to maintain control over the transfer of its franchises and to potentially expand its company-owned operations.