What is the effect of Fitstop exercising its Right of First Refusal on the transfer process?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
15.4 If we elect to exercise, or to assign under payment guarantee, the Right of First Refusal, the Parties shall act expeditiously to complete the transfer, provided that the date for the completion of the transfer can be extended at our option for up to an additional 30 calendar days.
15.5 If there are any material changes in the terms and conditions of the proposed transfer after we notify you of our election not to exercise our Right of First Refusal, or after the expiration of the time period within which we can elect to exercise our right, you shall notify us of the changes in writing and we shall then have an additional 10 calendar days within which to elect to exercise our Right of First Refusal.
15.6 If the proposed transfer is not completed for any reason within 90 calendar days after we elect not to exercise or assign our Right of First Refusal, or after the expiration of the time allowed for such election, a new Right of First Refusal commences as to the concerned transaction and any subsequent proposed sales or transfers by you.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if Fitstop elects to exercise its Right of First Refusal, the parties involved are required to act quickly to finalize the transfer. Fitstop, however, has the option to extend the completion date by up to 30 calendar days.
If Fitstop initially declines to exercise its Right of First Refusal but the terms of the proposed transfer materially change, the franchisee must notify Fitstop in writing. Fitstop then has an additional 10 calendar days to decide whether to exercise its Right of First Refusal.
If a proposed transfer is not completed within 90 calendar days after Fitstop declines to exercise its Right of First Refusal, or after the period for such election expires, a new Right of First Refusal applies to the transaction and any subsequent proposed transfers. This means the franchisee would need to go through the process again with any new potential buyers.