Does Monicals Pizza have a right of first refusal to purchase the assets of a franchise in Michigan?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
hisor 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).
- A provision that permits the Franchisor to directly or indirectly convey, assign or otherwise transfer its obligations to fulfill contractual obligations to the Franchisee unless a provision has been made for providing the required contractual services.
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- If the Franchisor's most recent financial statements are unaudited and show a net worth of less than $100,000.00 the Franchisee may request the Franchisor to arrange for the escrow of initial investment and other funds paid by the Franchisee until the obligations, if any, of the Franchisor to provide real estate, improvements, equipment, inventory, training or other items included in the franchise offering are fulfilled. At the option of the Franchisor, a surety bond may be provided in place of escrow.
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- THE FACT THAT THERE IS A NOTICE OF THIS OFFERING ON FILE WITH THE ATTORNEY GENERAL DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENFORCEMENT BY THE ATTORNEY GENERAL.
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- Any questions regarding this notice should be directed to:
State of Michigan Consumer Protection Division Attention: Franchise Bureau 670 Law Building Lansing, MI 48913 (517) 373-3800
FOR THE STATE OF MINNESOTA
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- ITE
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, Monicals Pizza retains the right of first refusal to purchase a franchise. Specifically, the FDD states that the subdivision does not prevent Monicals Pizza from exercising a right of first refusal to purchase the franchise.
In practical terms, 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 who becomes a franchisee and ensures that the brand's standards and reputation are upheld.
The FDD outlines several conditions under which Monicals Pizza may refuse a transfer, including if the proposed buyer doesn't meet Monicals Pizza's qualifications, is a competitor, is unwilling to comply with obligations, or if there are outstanding payments or defaults. Additionally, the FDD specifies that this right of first refusal applies to the purchase of the franchise assets on the same terms as a bona fide third party.
Prospective franchisees should be aware of this right, as it could affect their ability to sell the franchise to a buyer of their choice. It is important to understand the specific conditions and procedures outlined in the Franchise Agreement regarding the right of first refusal.