Under what conditions does Dog Haus waive its right of first refusal for franchise assignment?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
ime require) of each and every transfer, assignment and encumbrance by any Owner of any direct or indirect equity or voting rights in Franchisee, notwithstanding that the same may not constitute an Assignment under this Article 14.
- 14.2.3 Neither Franchisor's right of first refusal nor the other conditions of Assignment shall apply to a transfer by Franchisee of all of Franchisee's rights under this Agreement to a newly-formed corporation, limited liability company or other business Entity provided all of the Equity or voting interests of the new business Entity are owned by the same Owners (a "Qualified Assignment"). Any attempted or purported Assignment which fails to comply with the requirements of this Article 14 shall be null and void and shall constitute a Default under this Agreement.
- 14.3. Right of First Refusal. Except with respect to a Qualified Assignment, if Franchisee or an Owner receive a bona fide written offer ("Third Party Offer") from a third party (the "Proposed Buyer") to purchase or otherwise acquire any interest in Franchisee which will result in an Assignment within the meaning of this Agreement, Franchisee or the Proposed Buyer shall, within fourteen (14) days after receiving the Third Party Offer and before accepting it, apply to Franchisor in writing for Franchisor's consent to the proposed Assignment. To constitute a bona fide written offer, the Third Party Offer must also apply to purchase or otherwise acquire all Dog Haus Restaurants then owned and operated by Franchisee, or its Affiliates.
- 14.3.1 Franchisee, or the Proposed Buyer, shall attach to its application for consent to complete the transfer a copy of the Third Party Offer together with (i) information relating to the proposed transferee's experience and qualifications; (ii) a copy of the proposed transferee's current financial statement; and (iii) any other information material to the Third Party Offer, proposed transferee and proposed Assignment or that Franchisor requests.
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, Dog Haus has a right of first refusal when a franchisee receives an offer from a third party to purchase or acquire any interest in the franchise that would result in an assignment. This means that before a franchisee can sell their Dog Haus franchise to someone else, they must first offer Dog Haus the opportunity to buy it on the same terms.
Dog Haus will evaluate the offer and has 30 days to decide whether to purchase the franchise rights themselves. If Dog Haus decides not to purchase the franchise, the franchisee is then free to proceed with the sale to the third party, subject to meeting certain conditions. These conditions include the buyer meeting Dog Haus's current qualifications for new franchisees and signing the current franchise agreement.
However, Dog Haus's right of first refusal applies only to offers that apply to purchase all Dog Haus Restaurants then owned and operated by the franchisee or its affiliates. If the offer does not include all of the franchisee's Dog Haus locations, it would not trigger Dog Haus's right of first refusal. If there is any material change in the terms of the third party offer before the closing of the sale, Dog Haus has a right of first refusal to accept the new terms, subject to the conditions stated in Section 14.3 of the Franchise Agreement.