If I attempt to sell my Monicals Pizza franchise, does Monicals Pizza have a right of first refusal?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
If you attempt to sell your franchised restaurant or transfer your interest from the franchised restaurant to a third party, we may exercise our right of first refusal to purchase your franchise on the same terms and conditions as offered by a third party.
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 documents, the offer or proposal may be accepted by Franchisee or any of its owners, subject to Franchisor's prior written approval and all of the requirements of Section 18.2. Should the sale fail to close within one hundred twenty (120) days after the offer is delivered to Franchisor, Franchisor's right of first refusal shall renew and be implemented in accordance with this Section.
19.4 Sales or Transfers to Family Excepted
Source: Item 12 — TERRITORY (FDD pages 27–28)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, if you attempt to sell your franchised restaurant, Monicals Pizza has a right of first refusal to purchase your franchise. This means that before you can sell your franchise to a third party, you must first offer it to Monicals Pizza on the same terms and conditions as the third-party offer.
Specifically, if you propose to sell your Monicals Pizza restaurant, its assets, or any ownership interest, you must provide Monicals Pizza with a bona fide, executed written offer, including all relevant documents. This offer must pertain only to the assets or interests of the franchised restaurant and cannot include other properties or rights.
Monicals Pizza then has 30 days from the date they receive all required documents to exercise their right to purchase the assets or interest under the same terms as the offer you received. Monicals Pizza can substitute cash for the fair market value of any proposed form of payment. If Monicals Pizza decides to exercise its right of first refusal, it has up to 60 days to close the purchase after notifying you of its intent. If Monicals Pizza does not exercise its right of first refusal within the 30-day period, you may proceed with the sale to the third party, subject to Monicals Pizza's prior written approval and other requirements. However, if the sale does not close within 120 days after the offer was delivered to Monicals Pizza, their right of first refusal is renewed.
This right of first refusal does not apply to sales or transfers to family members. This clause allows Monicals Pizza to maintain control over who becomes a franchisee and ensures that any new owner meets their standards. It is a common practice in franchising to protect the brand and maintain consistency across all locations.