Does Desi District Franchise Group have a right of first refusal for transfers?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.5 Desi District Franchise Group'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), Desi District Franchise Group will have a right of first refusal, as set forth in this Section.
Franchisee (or its Owners) shall provide to Desi District Franchise Group a copy of the terms and conditions of any Transfer.
For a period of 30 days from the date of Desi District Franchise Group's receipt of such copy, Desi District Franchise Group 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 Desi District Franchise Group may substitute cash for any other form of payment).
If Desi District Franchise Group 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 page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, Desi District Franchise Group has a right of first refusal before a franchisee can engage in a transfer of their franchise. This right applies to all transfers except those under Section 15.3, transfers to a co-owner, or transfers to a spouse, sibling, or child of an owner.
Before a franchisee can transfer their Desi District franchise, they must provide Desi District Franchise Group with a copy of the terms and conditions of the proposed transfer. Desi District Franchise Group then has 30 days from the date of receipt to exercise its right to purchase the assets subject to the proposed transfer. The purchase will be for the same price and on the same terms and conditions as offered by the third party, although Desi District Franchise Group can substitute cash for any other form of payment.
If Desi District Franchise Group decides not to exercise its right of first refusal, the franchisee can proceed with the transfer, provided they meet all other terms and conditions outlined in the franchise agreement. This right of first refusal allows Desi District Franchise Group to maintain control over who becomes a franchisee within their system, ensuring that new franchisees meet their standards and are a good fit for the brand.