Must a Kitchen Solvers franchisee tender a right of first refusal to the franchisor before any transfer?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that the following provisions will govern any transfer or proposed transfer by you:
A. Transfers. This Agreement is entered into by us with specific reliance upon your financial qualifications and your personal experience, skills and managerial and financial qualifications as being essential to the satisfactory operation of your Business licensed hereunder. Consequently, neither your interest in this Agreement nor in your Business may be transferred or assigned to or assumed by any other person or entity (the "assignee"), in whole or in part, unless you have first tendered to us the right of first refusal to acquire such interest in accordance with Subparagraph 14.E, and if we fail to exercise such right, unless our prior written consent is obtained and the transfer conditions described in Subparagraph 14.C are satisfied. Any sale (including installment sale), lease, pledge, management agreement, contract for deed, option agreement, gift or otherwise or any arrangement pursuant to which you turn over all or part of the daily operation of your Business to a person or entity who shares in the losses and/or profits of your Business in a manner other than as an employee will be considered a transfer for purposes of this Agreement.
In the event of your insolvency or the filing of any petition by or against you under any provisions of any bankruptcy or insolvency law, if your legal representative, successor, receiver or trustee desires to succeed to your interest in this Agreement or your Business, such person first must so notify us, must tender the right of first refusal provided for in Subparagraph 14.E, and if we fail to exercise such right, must apply for and obtain our consent to the transfer and satisfy the transfer conditions described in Subparagraph 14.C. In addition, you or the assignee must pay our attorneys' fees and costs incurred in any bankruptcy or insolvency proceeding pertaining to you.
Source: Item 22 — Contracts (FDD page 49)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, a franchisee must first offer Kitchen Solvers a right of first refusal before transferring their interest in the franchise. This requirement is in place because Kitchen Solvers relies on the franchisee's financial qualifications, personal experience, skills, and managerial abilities.
This means that if a Kitchen Solvers franchisee wants to sell their franchise, they must first give Kitchen Solvers the opportunity to buy it themselves. If Kitchen Solvers declines to purchase the franchise, the franchisee can then proceed with the transfer to another party, subject to Kitchen Solvers's approval and certain conditions. The FDD specifies that any sale, lease, pledge, management agreement, contract for deed, option agreement, gift, or any arrangement where the franchisee turns over operation of the business to another party who shares in the profits/losses is considered a transfer.
In the event of franchisee insolvency or bankruptcy, the legal representative, successor, receiver, or trustee must also first notify Kitchen Solvers and tender the right of first refusal. Additionally, the franchisee or assignee is responsible for covering Kitchen Solvers's legal fees and costs associated with any bankruptcy or insolvency proceedings.