Does Counselor Realty have a right of first refusal to match any offer for a Counselor Realty franchisee's business?
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 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 if a franchisee proposes to transfer their business. If a franchisee receives a legitimate offer from a third party, they 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 receipt of the statement to accept the offer by providing written notice of acceptance to the franchisee.
Counselor Realty's 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 their 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 declines to accept the offer within the 30-day period, the franchisee is free to proceed with the transfer to the third party within the next 60 days, provided the transfer complies with Article 9 of the Franchise Agreement. The franchisee must offer the same terms to Counselor Realty for any subsequent sale or assignment.