What happens if Floyds 99 chooses not to exercise its right of first refusal?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
- e. If the Franchisor does not exercise the Franchisor's right to purchase the Franchisee's FLOYD'S 99 Shop as set forth above, the Franchisee will be free to keep or to sell, after such termination or expiration, to any third party, all of the physical assets of its FLOYD'S 99 Shop; provided, however, that all appearances of the Marks and the Franchisor's color scheme and trade dress are first removed in a manner approved in writing by the Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, if a franchisee wishes to transfer their rights under the Franchise Agreement, or any interest in it, they must first grant Floyds 99 a 90-day right of first refusal. This gives Floyds 99 the option to purchase the rights, interest, or assets on the same terms and conditions as a written offer from a proposed purchaser.
If Floyds 99 does not exercise its right to purchase the franchisee's Floyds 99 shop, the franchisee is then free to sell the physical assets of the shop to a third party after the termination or expiration of the agreement. However, the franchisee must first remove all appearances of Floyds 99's trademarks, color schemes, and trade dress in a manner approved in writing by Floyds 99.
This clause ensures that Floyds 99 maintains control over its brand and image, even when a franchise location changes ownership. It also provides an opportunity for Floyds 99 to strategically reacquire locations if it aligns with their business objectives. For a franchisee, this means they cannot simply transfer the business to anyone without offering Floyds 99 the first chance to buy it back, and they must ensure the location is completely de-branded if sold to a third party.