What is Kitchen Solvers' right of first refusal regarding a proposed transfer of a franchise?
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, Kitchen Solvers has the right of first refusal if a franchisee wishes to transfer their interest in the Franchise Agreement or their Kitchen Solvers business to another party. Before a franchisee can transfer their interest to an assignee, they must first offer Kitchen Solvers the opportunity to acquire the interest on the same terms as the proposed transfer.
This right of first refusal also applies in the event of a franchisee's insolvency or bankruptcy. If the franchisee's legal representative, successor, receiver, or trustee desires to take over the franchisee's interest in the Agreement or the Kitchen Solvers business, they must first notify Kitchen Solvers and offer them the right of first refusal.
This provision allows Kitchen Solvers to maintain control over who becomes a franchisee and ensures that any new franchisee meets their standards. If Kitchen Solvers declines to exercise its right of first refusal, the franchisee can proceed with the transfer, provided they meet additional conditions outlined in Subparagraph 14.C of the Franchise Agreement.