Are there exceptions to Crown Gold Exchange's right of first refusal regarding transfers?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.5 Crown Gold Franchising's Right of First Refusal. Before Franchisee (or any Owner) engages in a Transfer (except under Section 15.3, to a co-Owner, or to a spouse, sibling, or child of an Owner), Crown Gold Franchising will have a right of first refusal, as set forth in this Section.
Franchisee (or its Owners) shall provide to Crown Gold Franchising a copy of the terms and conditions of any Transfer.
For a period of 30 days from the date of Crown Gold Franchising's receipt of such copy, Crown Gold Franchising will have the right, exercisable by notice to Franchisee, to purchase the assets subject of the proposed Transfer for the same price and on the same terms and conditions (except that Crown Gold Franchising may substitute cash for any other form of payment).
If Crown Gold Franchising does not exercise its right of first refusal, Franchisee may proceed with the Transfer, subject to the other terms and conditions of this Article.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, Crown Gold Exchange has a right of first refusal before a franchisee can transfer their business. However, there are specific exceptions to this right. Crown Gold Exchange does not have a right of first refusal if the transfer is under Section 15.3, to a co-Owner, or to a spouse, sibling, or child of an Owner.
If the franchisee plans to transfer the business, they must provide Crown Gold Exchange with a copy of the terms and conditions of the proposed transfer. Crown Gold Exchange then has 30 days from the date of receipt to exercise its right to purchase the assets under the same terms and conditions, but can substitute cash for other forms of payment.
If Crown Gold Exchange decides not to exercise its right of first refusal, the franchisee can proceed with the transfer, provided they meet all other requirements outlined in the franchise agreement. This clause ensures that Crown Gold Exchange maintains control over who enters their franchise system while allowing for certain familial or co-owner transfers without intervention.