Who determines whether a change in an Offer is material for Hawaiian Bros Island Grill?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
If the Option is not exercised, the Principal or Developer, as applicable, will immediately notify Company in writing of any change in the terms of an Offer.
For purposes of clarification, a change in the direct or indirect Ownership Interests of the proposed transferee will be deemed a change in the terms of an Offer.
Any material change in the terms of an Offer will cause it to be deemed a new Offer, conferring upon Company a new Option pursuant to this Section.
The Option Period with respect to the new Option will be deemed to commence on the day that Company receives written notice of a material change in the terms of the original Offer.
Company will determine whether a change in an Offer is material in its sole discretion.
Source: Item 23 — RECEIPTS (FDD pages 77–262)
What This Means (2025 FDD)
According to the 2025 FDD, Hawaiian Bros Island Grill has the sole discretion to determine whether a change in an offer is considered material. This clause relates to the transfer of ownership interests, where if a Principal or Developer seeks to sell their interests to a third party after an option period expires, Hawaiian Bros Island Grill retains certain rights.
Specifically, if the initial option to purchase the interests is not exercised, the seller can proceed with the sale to the third party, provided Hawaiian Bros Island Grill approves the transfer and the sale occurs within 90 days. However, any change in the ownership interests of the proposed transferee is automatically considered a change in the terms of the offer.
If any change in the offer is deemed material, it is treated as a new offer, which then grants Hawaiian Bros Island Grill a new option period. The company's determination of materiality is significant because it directly impacts the timeline and conditions under which a transfer of ownership can occur, potentially delaying or complicating the sale if Hawaiian Bros Island Grill perceives the changes as substantial enough to warrant a new evaluation period.