How long is the Option Period that Moes Southwest Grill has to exercise its right of first refusal?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
ty interest in the assets of the Franchised Business (not including this Agreement) to a lender for the sole purpose of financing your acquisition, development, and/or operation of the Franchised Business.
16.8 Right of First Refusal.
- A. Option Period. If you receive and want to accept a bona fide written offer from a third party to purchase the Franchised Business or substantially all the interests in you (collectively, the "Interest"), you must give us: (i) prompt written notice of the offer, stating the name and address of the prospective purchaser and the price and terms of the offer; and (ii) copies of all written documents and other information reasonably related to the offer provided by or to the prospective purchaser. For 30 days after we receive the information required by this Section (the "Option Period"), we will have the option to purchase the Interest on the same terms as the third party offers; provided, however, if any portion of the consideration the thirdparty offers is other than cash, we will have the option of substituting the equivalent cash value.
- B. Appraisal Process.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, if a franchisee receives a legitimate offer from a third party to purchase their franchise business, Moe's Southwest Grill has the first right to purchase the franchise on the same terms. This is known as the right of first refusal. To initiate this process, the franchisee must provide Moe's Southwest Grill with written notice of the offer, including the potential buyer's information, the proposed price, the terms of the offer, and all related documents.
Moe's Southwest Grill then has a 30-day "Option Period" to decide whether to match the third-party offer and purchase the franchise. If any part of the third-party's offer involves non-cash consideration, Moe's Southwest Grill has the option to substitute an equivalent cash value.
If Moe's Southwest Grill and the franchisee cannot agree on the cash value of the non-cash consideration, an appraisal process will be used. Each party will designate an appraiser, and those two appraisers will select a third. The majority determination of the three appraisers will be binding. The franchisee and Moe's Southwest Grill will each pay for their designated appraiser, and split the cost of the third appraiser. If Moe's Southwest Grill does not exercise its right of first refusal within the 30-day Option Period, the franchisee has 30 days after the Option Period expires to sell the franchise to the third party, according to the terms specified in the notice.