Who determines whether a change in an Offer is material for Hawaiian Bros Island Grill, and on what basis?
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 Franchise Disclosure Document, Hawaiian Bros Island Grill has the sole discretion to determine whether a change in an offer is material.
In the context of the franchise agreement, an "Offer" refers to a legitimate written proposal to purchase either a Principal's Ownership Interest in the Franchisee or the Franchisee's Asset Interests. If the Principal or Developer intends to sell their Interests to a third party after not exercising their option, they must ensure the conditions are no more favorable than the original offer. Additionally, Hawaiian Bros Island Grill must approve the proposed transferee.
Any alteration to the ownership interests of the proposed transferee is automatically considered a change in the terms of the offer. If Hawaiian Bros Island Grill deems any change to be material, it is considered a new offer, which restarts the option period for Hawaiian Bros Island Grill. This clause allows Hawaiian Bros Island Grill to reassess any new offer and maintain control over who becomes a franchisee or owner within the system.