How long does Hck Hot Chicken Franchisor have to exercise its right of first refusal?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Any material change in the terms of an offer prior to closing or the failure to close the transaction within 60 days following the written notice provided
by Area Developer (the "ROFR Period") shall cause it to be deemed a new offer, subject to the same right of first refusal by Franchisor, or its third party designee, as in the case of the initial offer. Franchisor's failure to exercise such right of first refusal shall not constitute consent to the transfer or a waiver of any other provision of this Development Agreement, including any of the requirements of this Section with respect to the proposed transfer.
Source: Item 23 — RECEIPTS (FDD pages 55–245)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the franchisor has a 60-day period, referred to as the "ROFR Period," to exercise its right of first refusal after receiving written notice from the Area Developer regarding a proposed transaction. This means that if an Area Developer intends to transfer ownership or control, they must first notify Hck Hot Chicken, giving the franchisor the option to step in and acquire the business or interest on the same terms.
This right of first refusal allows Hck Hot Chicken to maintain control over who becomes an Area Developer within their system. It ensures that the franchisor has the opportunity to approve any changes in ownership, preventing potentially unsuitable individuals or entities from joining the franchise network. The franchisor can evaluate whether the proposed new owner aligns with the brand's values and has the necessary experience and financial resources to successfully operate the Hck Hot Chicken business.
If Hck Hot Chicken makes any material changes to the terms of the offer before closing or if the transaction does not close within the 60-day ROFR Period, it is considered a new offer. This restarts the right of first refusal process, giving the franchisor another opportunity to evaluate the situation. However, the franchisor's failure to exercise its right of first refusal in one instance does not waive its rights or indicate consent to the transfer, and all other requirements of the Development Agreement still apply to the proposed transfer.
For a prospective Area Developer, this means that any potential sale or transfer of their business is subject to Hck Hot Chicken's approval. They must be prepared to provide the franchisor with sufficient notice and allow them the full 60-day period to make a decision. Understanding this process is crucial for Area Developers when considering future exit strategies or changes in ownership structure.