Does Dryer Vent Squad have a right of first refusal to purchase the assets of a Dryer Vent Squad franchise?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
If Franchisee or an Owner desires to engage, in whole or in part, in a Transfer of Franchisee, this Agreement, Franchisee's Dryer Vent Squad Business, Franchisee's non-residential Administrative Office, and/or Franchisee's Administrative Office, then Franchisee or such Owner (as applicable) must obtain a bona fide, signed written offer from the fully disclosed purchaser (the "Offer") and submit an exact copy of the Offer to Franchisor. Franchisor shall have 30 days after receipt of the Offer to decide whether Franchisor will purchase the interest in Franchisee, Franchisee's Dryer Vent Squad Business, and/or Franchisee's Administrative Office for the same price and upon the same terms contained in the Offer (however, Franchisor may substitute cash for any form of payment proposed in the Offer). If Franchisor notifies Franchisee that Franchisor intends to purchase the interest within said 30 day period, Franchisee or Owner (as applicable) must sell the interest to Franchisor. Franchisor will have at least an additional 60 days to prepare for closing. Franchisor shall be entitled to receive from Franchisee or Owner (as applicable) all customary representations and warranties given by Franchisee or Owner (as applicable) as the seller of the assets and/or the ownership interest or, at Franchisor's election, the representations and warranties contained in the offer. If Franchisor does not exercise its right of first refusal, Franchisee or Owner (as applicable) may complete the Transfer to the purchaser pursuant to and in accordance with the terms of the Offer, provided that separate and apart from this Article 14.F. right of first refusal, Franchisee complies with the terms of this Article 14. However, if the sale to the purchaser is not completed within 120 days after delivery of the Offer to Franchisor, or there is a material change in the terms of the sale, Franchisor will again have the right of first refusal specified in this Article 14.F. Franchisor's right of first refusal in this Article 14.F. shall not apply to any Transfer pursuant to Article 14.E. of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 51–207)
What This Means (2024 FDD)
According to Dryer Vent Squad's 2024 Franchise Disclosure Document, Dryer Vent Squad retains a right of first refusal if a franchisee intends to transfer their franchise. Specifically, if a franchisee or owner wants to transfer the franchise, the franchise agreement, the Dryer Vent Squad business, or the administrative office, they must first get a signed written offer from a potential buyer and provide a copy to Dryer Vent Squad.
Dryer Vent Squad then has 30 days to decide if it wants to purchase the franchisee's interest, Dryer Vent Squad business, or administrative office under the same terms as the offer. Dryer Vent Squad can, however, substitute cash for any other form of payment proposed in the offer. If Dryer Vent Squad decides to purchase the interest, the franchisee or owner must sell it to them, and Dryer Vent Squad has at least 60 additional days to prepare for closing.
The franchisee or owner must provide customary representations and warranties as the seller of the assets or ownership interest. If Dryer Vent Squad does not exercise its right of first refusal, the franchisee or owner can proceed with the transfer to the original purchaser, provided they comply with all other transfer terms in the agreement. However, if the sale is not completed within 120 days after Dryer Vent Squad received the offer, or if there is a material change in the terms, Dryer Vent Squad's right of first refusal is reinstated. This right of first refusal does not apply to transfers under Article 14.E of the agreement.