In Michigan, can Mr. Sandless require a franchisee to resell items not uniquely identified with Mr. Sandless?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
- (h) 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 of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in subdivision (c).
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless FDD, Michigan law includes specific protections for franchisees. Specifically, Mr. Sandless cannot enforce a provision that requires a franchisee to resell items to the company that are not uniquely identified with the Mr. Sandless brand. This protection is explicitly stated within the list of unfair provisions prohibited by Michigan state law. This ensures that franchisees are not unfairly burdened with reselling generic or non-branded items back to Mr. Sandless.
However, this protection does not prevent Mr. Sandless from having a right of first refusal to purchase the assets of the franchise. This means that if a franchisee decides to sell their Mr. Sandless business, the company has the first opportunity to buy it on the same terms as a legitimate third-party offer. Additionally, Mr. Sandless retains the right to acquire the assets of a franchise if the franchisee has breached the franchise agreement and failed to correct the breach, provided they pay the market or appraised value for those assets.
Therefore, while Mr. Sandless cannot force a franchisee to resell non-branded items, they do maintain certain rights regarding the purchase of the franchise or its assets under specific conditions. This ensures a balance between protecting the franchisee from unfair practices and allowing Mr. Sandless to maintain control over its brand and network.