Does Surestay Hotel By Best Western have the right of first refusal to purchase a franchise?
Surestay_Hotel_By_Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) A provision which permits a franchisor to refuse to permit a transfer or ownership of a franchise, except for good cause. This 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:
- (i) The failure of the proposed transferee to meet the franchisor's then current reasonable qualifications or standards.
- (ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor.
- (iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
- (iv) 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.
Source: Item 23 — Receipts (FDD pages 88–286)
What This Means (2025 FDD)
According to Surestay Hotel By Best Western's 2025 Franchise Disclosure Document, the franchisor has the right of first refusal to purchase a franchise. This means that if a franchisee wants to sell their Surestay Hotel By Best Western franchise, they must first offer the franchisor the opportunity to buy it on the same terms as any other potential buyer.
This right allows Surestay Hotel By Best Western to maintain control over its franchise system and ensure that any transfer of ownership aligns with its strategic goals. For a franchisee, this could potentially limit the pool of potential buyers and possibly the sale price, as they must prioritize the franchisor's offer before considering others.
However, the FDD also states that the franchisor cannot unreasonably withhold consent for a transfer of ownership. The document outlines specific, justifiable reasons for refusing a transfer, such as the proposed buyer's failure to meet the franchisor's standards, being a competitor, unwillingness to comply with obligations, or outstanding payments/defaults. These stipulations protect the franchisee from arbitrary denial of a sale to a qualified buyer other than the franchisor.