When Crawlspace Medic exercises its right of first refusal, how many days does Crawlspace Medic have to close the purchase?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.5.4 If Franchisor does not exercise its right to buy within thirty (30) days, Developer may thereafter transfer the interest to the transferee on terms no more favorable than those disclosed to Franchisor, provided that such transfer is subject to Franchisor 's prior written approval pursuant to Section 6.3 hereof.
However, if (i) the sale to the transferee is not completed within one hundred twenty (120) days after the offer is given to Franchisor or (ii) there is any material change in the terms of the offer, the offer will again be subject to Franchisor's right of first refusal.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, if a developer (franchisee) intends to transfer their interest in the franchise, they must first offer Crawlspace Medic the right to purchase the franchise on the same terms. Crawlspace Medic has thirty (30) days to exercise this right of first refusal. If Crawlspace Medic does not exercise its right to buy the franchise within this 30-day period, the developer may then proceed with the transfer to another party, provided the terms are no more favorable than those initially offered to Crawlspace Medic and that Crawlspace Medic provides prior written approval for the transfer.
However, there are specific conditions that could trigger the right of first refusal again. If the sale to the new party is not completed within one hundred twenty (120) days after the initial offer was made to Crawlspace Medic, or if there are any significant changes to the terms of the offer, the developer must once again offer Crawlspace Medic the right of first refusal. This means that a franchisee needs to be aware of these timelines to ensure they remain in compliance with the franchise agreement when attempting to transfer their business.
This clause protects Crawlspace Medic by giving it the opportunity to control who enters their franchise system and ensures that any transfer aligns with their strategic interests. For a prospective franchisee, it highlights the importance of understanding the transfer conditions and timelines, as delays or changes in terms can restart the process and potentially complicate the sale of their franchise.