What is the meaning of 'Notice of Intent to Purchase' in the context of Southern Steer's right of first refusal?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchisee will not Transfer or otherwise dispose of any interest in the Southern Steer Business or any part of the Major Assets to any purchaser without first offering the same to the Franchisor in a written offer that contains the purchase price, payment terms, and all other material terms and conditions of the proposed transaction with the third party, including price and payment terms ("Franchisee's Offer").
The Franchisor will have 30 days after receipt of the Franchisee's Offer to give the Franchisee written notice of the Franchisor's desire to either waive its option to purchase ("Waiver Notice") or its intention to exercise its rights to purchase or acquire the Major Assets according to the terms contained in the Franchisee's Offer ("Notice of Intent to Purchase").
- 19.2.
Due Diligence Review.
If the Franchisor provides the Franchisee with a Notice of Intent to Purchase within 30 days after receipt of the Franchisee's Offer, then the Franchisor will have 90 days after the date the Notice of Intent to Purchase is received by the Franchisee ("Notice Date") to conduct a "due diligence" review.
The Franchisee will promptly provide the Franchisor with all Financial Records and other information requested by the Franchisor or its representatives to conduct its due diligence review.
The Franchisor will have the absolute and unconditional right to terminate the Notice of Intent to Purchase and any obligation to purchase the Southern Steer Business or Major Assets from the Franchisee for any reason and at any time during the 90-day due diligence review period by giving the Franchisee written notice.
- 19.3.
Good Faith Negotiations.
Unless the Franchisor terminates its Notice of Intent to Purchase as provided in Section 19.2 the Franchisee and the Franchisor will act in good faith to agree on the terms and conditions of the definitive agreement or agreements for the purchase of the Southern Steer Business or Major Assets (other than those objective terms and conditions contained in the Franchisee's Offer) and the closing date for the sale of the Southern Steer Business or Major Assets to the Franchisor will take place within 120 days after the Notice Date.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, a 'Notice of Intent to Purchase' is a written notification from Southern Steer to a franchisee, indicating the company's desire to exercise its right to purchase the franchisee's Southern Steer business or its major assets, based on the terms the franchisee has already offered to a third-party buyer. This notice is triggered when a franchisee intends to transfer or dispose of their business interests and must first offer those interests to Southern Steer.
Upon receiving the franchisee's offer, Southern Steer has 30 days to respond with either a 'Waiver Notice,' indicating they are declining to purchase, or a 'Notice of Intent to Purchase,' signaling their intention to proceed with the acquisition. If Southern Steer issues a 'Notice of Intent to Purchase,' they then have 90 days from the date the franchisee receives the notice (the 'Notice Date') to conduct a due diligence review.
During this 90-day due diligence period, Southern Steer has the right to examine the franchisee's financial records and other relevant information. Importantly, Southern Steer retains the unconditional right to terminate the 'Notice of Intent to Purchase' at any point during this review period, for any reason, without obligation. If Southern Steer does not terminate the notice, both parties are then expected to negotiate in good faith to finalize the terms of the purchase agreement, with the closing date for the sale occurring within 120 days after the initial 'Notice Date'.