What is the condition regarding Section 19 that a Monicals Pizza franchisee must meet before transferring?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
19. RIGHT OF FIRST REFUSAL
19.1 Submission of Offer
If Franchisee, or any of its owners, proposes to sell the Franchised Restaurant (or any of its assets outside of the normal course of business), any ownership interest in Franchisee or any ownership interest in the Franchise granted hereunder, Franchisee shall obtain and deliver a bona fide, executed written offer or proposal to purchase, along with all pertinent documents including any contract and all due diligence materials, to Franchisor. The offer must relate only to a sale of the assets or interests related to the Franchised Restaurant, and may not include any other property or rights.
19.2 Franchisor's Right to Purchase
Franchisor shall, for thirty (30) days from the date of delivery of all such documents, have the right, exercisable by written notice to Franchisee, to purchase the offered assets or interest for the price and on the same terms and conditions contained in such offer communicated to Franchisee. Franchisor has the right to substitute cash for the fair market value of any form of payment proposed in such offer. Franchisor's credit shall be deemed at least equal to the credit of any proposed buyer. After providing notice to Franchisee of Franchisor's intent to exercise this
right of first refusal, Franchisor shall have up to sixty (60) days to close the purchase. Franchisor shall be entitled to receive from Franchisee all customary representations and warranties given by Franchisee as the seller of the assets or such ownership interest together with all representations and warranties contained in the proposal.
19.3 Non-Exercise of Right of First Refusal
If Franchisor does not exercise its right of first refusal within thirty (30) days from the date of delivery of all such doc
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, Section 19 outlines the conditions related to the sale or transfer of a franchised restaurant. Specifically, if a Monicals Pizza franchisee proposes to sell their restaurant, its assets outside the normal course of business, any ownership interest in the franchise, or any ownership interest in the franchisee, they must first obtain a bona fide, executed written offer or proposal to purchase. This offer, along with all pertinent documents including any contract and all due diligence materials, must be delivered to Monicals Pizza.
The offer must exclusively pertain to the sale of assets or interests directly related to the franchised restaurant and cannot include any other property or rights. This requirement ensures that Monicals Pizza has a clear and focused opportunity to evaluate the proposed transfer of ownership.
Monicals Pizza then has a right of first refusal, allowing them 30 days from the delivery of all required documents to decide whether to purchase the assets or interest themselves, matching the price and terms of the offer. This provision enables Monicals Pizza to maintain control over its franchise network and ensure that any new owners meet their standards. If Monicals Pizza decides to exercise its right of first refusal, they have up to 60 days to close the purchase after providing notice to the franchisee.
If Monicals Pizza chooses not to exercise its right of first refusal within the 30-day period, the franchisee is then free to proceed with the sale to the third party, according to the terms of the offer they submitted. However, this entire process is bypassed if the transfer is to a member of the franchisee's family, although the franchisee must still comply with Section 18.2 before such a transfer.