Franchise Glossary
Right of First Refusal
What is Right of First Refusal in franchising?
A contractual right giving the franchisor, or in some cases a current franchisee, the option to purchase a unit before the owner can sell it to a third party. If a franchisee wants to sell, they must first offer the unit to the right-holder under the same terms as the outside buyer. Rights of first refusal are common in franchise agreements and affect exit planning. Understand exactly how yours is structured before signing.