factual

Does Deka Lash have a right of first refusal to acquire a franchisee's business?

Deka_Lash Franchise · 2024 FDD

Answer from 2024 FDD Document

Provision Franchise Agreement Summary
Agreement
  • execute any transfer, amendment, or release forms that we may require;
  • provide to us a copy of the proposed transfer documents;
  • comply with the post-termination provisions; and
  • request that we provide the prospective transferee with our current franchise disclosure document.
  • pay to us the Transfer Fee;
  • pay to us the Prospect Generation Fee, as applicable;
  • the purchase price and terms of the proposed transfer are not so burdensome to the prospective transferee as to impair or materially threaten its future operation.
n. Franchisor's right to first 14.6 Transferee must: - meet our criteria; - execute our then-current Franchise Agreement; - pay any initial franchise fee, as applicable; - satisfactorily complete our initial training program; - obtain necessary licenses and permits; - obtain any lessor approval for transfer; - the transfer must be made in compliance with any laws that apply to the transfer. We have a right of first refusal to match any
refusal to acquire franchisee's business purchase offer for your franchise, any interest in the franchise, or substantially all the assets of the Franchised Business.
o. Franchisor's option to purchase franchisee's business 15.c. Upon franchisee's death, we may purchase the business for fair market value.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 49–54)

What This Means (2024 FDD)

According to Deka Lash's 2024 Franchise Disclosure Document, Deka Lash does have a right of first refusal to acquire a franchisee's business. Specifically, Deka Lash has the right to match any purchase offer for the franchise, any interest in the franchise, or substantially all of the assets of the Franchised Business. This is detailed in Section 14.6 of the Franchise Agreement.

This right of first refusal means that if a Deka Lash franchisee receives an offer to purchase their franchise, they must first offer Deka Lash the opportunity to buy the business on the same terms. This gives Deka Lash control over who enters the system as a new franchisee and ensures that the terms of the transfer are acceptable to them.

Additionally, Section 15.c. of the Franchise Agreement states that upon the franchisee's death, Deka Lash has the option to purchase the business for fair market value. This provides a mechanism for Deka Lash to maintain control over the franchise in the event of the franchisee's death, ensuring business continuity and brand consistency. This is separate from the right of first refusal, as it is an option exercised upon a specific event (death) rather than a response to a third-party offer.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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