Does Face Foundrie have a right of first refusal to acquire the area developer's business?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section(s) in | Summary | |
|---|---|---|---|
| Area Development Agreement | rights or obligations under the Area Development Agreement, or any material asset of your business, without our prior written consent, which shall be subject to all of the conditions and requirements for transfers set forth in the Franchise Agreement executed simultaneously with the Area Development Agreement that we deem applicable to a proposed transfer under the Area Development Agreement. | ||
| (l) Franchisor approval | Section 7.2 | We have the right to approve transfers. | |
| of transfer by area | |||
| developer | |||
| (m) Conditions for franchisor’s approval of transfer | Sections 7.2 and 7.3 | Unless waived, a transfer of the Area Development Agreement is conditioned on, among other factors, the requirement that the proposed transfer of the Area Development Agreement be made in conjunction with a simultaneous transfer of all existing Franchise Agreements to the same approved transferee. Additionally, your first Facial Bar under your first Franchise Agreement must be open and operating. | |
| (n) Franchisor’s right of | Not Applicable | ||
| first refusal to acquire | |||
| area developer’s | |||
| business |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION OF THE FRANCHISE RELATIONSHIP (FDD pages 51–59)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the franchisor does not have a right of first refusal to acquire the area developer's business. Item 17 outlines the terms for renewal, termination, transfer, and dispute resolution, and specifically addresses whether Face Foundrie has a right of first refusal.
Specifically, the table within Item 17 details various provisions related to the Area Development Agreement. Among these provisions are items addressing the franchisor's approval of transfers by the area developer and conditions for the franchisor's approval of such transfers. However, the table clearly indicates that the section concerning the 'Franchisor’s right of first refusal to acquire area developer’s business' is marked as 'Not Applicable.'
This 'Not Applicable' designation means that Face Foundrie has contractually waived its right to step in and match any offer made to purchase the area developer's business. This could provide more flexibility for the area developer when planning their exit strategy, as they are not obligated to offer Face Foundrie the first opportunity to buy the business. However, the area developer is still subject to Face Foundrie's approval of any transfer.