In Michigan, does Monicals Pizza have a right of first refusal to purchase the assets of a franchise?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
The subdivision does not prevent a Franchisor from exercising a right of first refusal to purchase the franchise.
Good cause shall include, but is not limited to:
The failure of the proposed transferee to meet the Franchisor's then-current reasonable qualifications or standards.
The fact that the proposed transferee is a competitor of the Franchisor or Subfranchisor.
The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
The failure of the Franchisee or proposed transferee to pay any sums owing to the Franchisor or to cure any default in the Franchise Agreement existing at the time of the proposed transfer.
A provision that requires the Franchisee to resell to the Franchisor items that are not uniquely identified with the Franchisor. This subdivision does not prohibit a provision that grants to a Franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the Franchisor the right to acquire the assets of a franchise for the market or appraised value and has failed to cure the breach in the manner provided in ITEM 17(g).
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, Monicals Pizza does have a right of first refusal to purchase the assets of a franchise. Specifically, the FDD states that the subdivision regarding receipts does not prevent Monicals Pizza from exercising a right of first refusal to purchase the franchise.
This means that if a Monicals Pizza franchisee in Michigan decides to sell their franchise, they must first offer Monicals Pizza the opportunity to buy it on the same terms as any other potential buyer. This right allows Monicals Pizza to maintain control over its brand and ensure that any new owners meet their standards.
The FDD also specifies conditions under which 'good cause' exists, allowing Monicals Pizza to refuse a transfer. These conditions include the proposed transferee failing to meet Monicals Pizza's qualifications, being a competitor, being unwilling to comply with obligations, or failing to pay sums owed. Additionally, the right of first refusal extends to purchasing the assets of a franchise on the same terms as a third party or acquiring assets for market or appraised value if the franchisee has failed to cure a breach.