What are the terms of Desi District Franchise Group's right of first refusal?
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, before a franchisee engages in a transfer of their franchise, Desi District Franchise Group has a right of first refusal, except under certain conditions. These exceptions include transfers to a corporation or limited liability company for convenience of ownership, to a co-owner, or to a spouse, sibling, or child of an owner.
To exercise its right of first refusal, Desi District must receive a copy of the terms and conditions of any proposed transfer from the franchisee or its owners. Following receipt of this information, Desi District has 30 days to decide whether to purchase the assets subject to the proposed transfer. This decision is communicated to the franchisee via notice.
If Desi District exercises its right, it can purchase the assets at the same price and under the same terms and conditions as the proposed transfer. However, Desi District has the option to substitute cash for any other form of payment. If Desi District chooses not to exercise its right of first refusal within the 30-day period, the franchisee is then permitted to proceed with the transfer, provided they meet all other applicable terms and conditions outlined in the franchise agreement.